Energy Costs2018-09-18T09:18:12+00:00

Elevated energy costs continue to add pressure to contractors’ margins as well as material production and deliveries.

According to the Federal Reserve Bank of Saint Louis, West Texas Intermediate Oil (WTI) averaged just under $51/barrel in 2017. The recent Wall Street Journal bi-monthly economist survey projects the oil prices will remain elevated over the next three years, while other indicators project softening price pressure. West Texas Intermediate Oil prices remain elevated in August, reaching $67.20/barrel. The United States’ withdrawal from the Iranian nuclear pact, as well as tight global supply, is impacting oil prices. In addition, US is imposing sanctions on Iran will take one million barrels per day of Iranian crude off the market. Market experts are watching closely to see if North American shale producers can quickly fill the gap. These smaller, nimbler producers have been able to increase output to take advantage of the higher prices. Gasoline prices nationally have spiked in 2018, forecasted to reach $2.83/ga. Once the supply-chain side is eventually resolved, prices are expected to decline. The U.S. Energy Information Administration (US-EIA), forecasts national gasoline prices to retreat to more than $2.60/gallon by 2020. In summary, energy prices should remain elevated, yet manageable.


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