09 December 2008 16:17 [Source: ICIS news]
WASHINGTON (ICIS news)--?xml:namespace>
The department’s Energy Information Administration (EIA) also said that it expects the average annual price for Henry Hub natural gas will fall to $6.25/m Btu for 2009, a decline of 8% from its forecast just a month ago and 16.5% below the natgas pricing outlook the administration gave in October.
As recently as July this year - when crude prices were at record highs and the full impact of the developing global downturn had yet to be felt - the administration was expecting the benchmark US West Texas intermediate (WTI) crude to sell at an average $133/bbl in 2009.
In that July outlook, the administration said it expected Henry Hub gas prices to average $11.62/m Btu for 2009.
In its monthly short-term energy outlook (STEO) issued on Tuesday, the administration said that it is lowering its energy price forecasts so sharply because “the current global economic slowdown is now projected to be more severe and longer” than anticipated in its November STEO.
“World real gross domestic product (GDP) growth is projected to slow from about 4% in 2006 and 2007 to about 2.7% this year and 0.5% in 2009,” the administration said. The administration noted that just a month ago it had expected GDP growth of 1.8% for next year.
Consequently, global oil consumption is expected to decline by 50,000 bbl/day in 2008 and by 450,000 bbl/day in 2009, the administration said, “which would mark the first time in three decades that world consumption would decline in two consecutive years”.
Global average daily oil consumption in 2007 was at a record high of 85.8m bbl/day, according to the administration. A decline of 450,000 bbl/day in 2009 would represent a comparatively slim 0.5% reduction in global demand.
However, the administration anticipates no parallel decline in natural gas consumption next year, at least not in the
The EIA said that
“In 2009, consumption [of natural gas] in the residential, commercial and electric power sectors is expected to grow, albeit slightly,” the administration said.
“However, poor economic conditions both domestically and worldwide are expected to hamper US industrial production activities”, and “natural gas consumption in the US industrial sector is expected to decline by 2.4% in 2009”, the administration said.
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