WASHINGTON (MNI) – The following are the first part of excerpts
from the Energy Information Administration’s Short-Term Energy Outlook
published Tuesday:
Highlights
* Crude oil prices fluctuated considerably last month, with the
West Texas Intermediate (WTI) spot price ranging from a high of $86 per
barrel on May 3 to a low of $65 on May 25, before ending the month at
$74. According to some market analysts, uncertainty over the global
economic recovery, particularly with respect to Europe’s debt crisis and
the tightening of credit by China, and liquidation of futures contracts
contributed to the crude price decline. Moreover, WTI prices fell
further than most other crudes because of record high inventories in
Cushing, Oklahoma. EIA projects WTI crude oil spot prices will average
$79 per barrel this year and $83 per barrel in 2011, both about $3 lower
than in last month’s Outlook.
* EIA forecasts that regular-grade motor gasoline retail prices
will average $2.79 per gallon during this summer’s driving season (the
period between April 1 and September 30), up from $2.44 per gallon last
summer. The summer gasoline price forecast is down considerably ($0.15)
from last month’s Outlook primarily as a result of the lower crude oil
price forecast.
* Based on the current Atlantic hurricane season outlook from
the National Oceanic and Atmospheric Administration (NOAA), EIA
estimates median outcomes for total shut-in production in the
Federally-administered Gulf of Mexico during the upcoming hurricane
season (June through November) of 26 million barrels of crude oil and
166 billion cubic feet (Bcf) of natural gas (see 2010 Outlook for
Hurricane-Related Production Outages in the Gulf of Mexico). Actual
shut-ins are likely to differ significantly from this expectation
depending on the number, track, and strength of hurricanes as the season
progresses.
* This Outlook includes EIA’s preliminary estimates of
reductions in production resulting from a 6-month deepwater drilling
moratorium announced by Secretary Salazar on May 27. The reductions in
crude oil production resulting from the moratorium are estimated to
average about 26,000 barrels per day (bbl/d) in the fourth quarter of
2010 and roughly 70,000 bbl/d in 2011. EIA will refine its moratorium
impacts as additional information becomes available.
* EIA expects the Henry Hub natural gas spot price to average
$4.49 per million Btu (MMBtu) this year, a $0.54-per-MMBtu increase over
the 2009 average. EIA expects the Henry Hub spot price to average $5.06
per MMBtu in 2011, down $0.28 per MMBtu from last month’s Outlook.
* The annual average residential electricity price changes only
moderately over the forecast period, averaging 11.6 cents per
kilowatthour (kWh) in 2010, up slightly from 11.5 cents per kWh in 2009,
and rising to 11.9 cents per kWh in 2011.
* Estimated U.S. carbon dioxide (CO2) emissions from fossil
fuels, which declined by 7.0 percent in 2009, are expected to increase
by 2.9 percent and 1.4 percent in 2010 and 2011, respectively, as
economic growth spurs higher energy consumption.
Global Crude Oil and Liquid Fuels
Crude Oil and Liquid Fuels Overview. EIA has lowered its
projections for world oil prices slightly for 2010. Uncertainty about
economic growth in China and in the Euro zone has continued to weigh on
oil markets, and declines in equity markets have led to fears that the
economic recovery may not progress as fast as had been hoped. To date,
the Organization of the Petroleum Exporting Countries (OPEC) has
publicly made no suggestions that it would adjust its supply targets
despite some downward adjustments in oil prices.
Global Crude Oil and Liquid Fuels Consumption. EIA projects that
world oil consumption will grow by 1.5 million bbl/d in 2010 and 1.6
million bbl/d in 2011, about the same as in last month’s Outlook. The
growth in oil consumption is expected to be largely concentrated in the
Asia-Pacific and Middle East regions (World Liquid Fuels Consumption
Chart).
Non-OPEC Supply. Non-OPEC supply is projected to increase by
500,000 bbl/d in 2010, 160,000 bbl/d lower than in last month’s Outlook.
A more pessimistic outlook for supply growth in Brazil and Central Asia
is the principle source of the downward revision, though these two areas
(along with the United States) still constitute the bulk of expected
non-OPEC supply growth in 2010. In the case of Brazil, the lower
production outlook is the result of a re-assessment of production from
established fields. Offsetting projected supply growth in 2010 are
further declines in mature basins in Mexico, the United Kingdom, and
Norway. Even though EIA still expects that production in Mexico will
decline in 2010, recent data have been surprisingly strong, which has
moderated that forecast. Non-OPEC supplies are expected to fall
by190,000 bbl/d in 2011, as supply growth from the United States slows.
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** Market News International Washington Bureau: 202-371-2121 **
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