09 June 2009 20:15 [Source: ICIS news]
WASHINGTON (ICIS news)--Oil prices will continue to rise through the rest of this year and into 2010, driven in part by expectations of a global economic recovery and increased consumption, the US Department of Energy (DOE) said on Tuesday.
The department’s data and analysis arm, the Energy Information Administration (EIA), also said in its monthly short-term energy outlook (STEO) that while US natural gas prices will remain flat for the rest of this year, they will rise in 2010 as expected economic growth boosts industrial consumption.
The administration said it expected the ?xml:namespace>
WTI crude prices were forecast to average $67.42/bbl in 2010, the administration said, but that outlook also reflected a significant upward revision of 16% from last month’s estimate for an average $58/bbl for next year.
The administration said that natural gas spot prices at the Henry Hub were expected to hold under $4/m cubic feet (mcf) until late this year.
The agency said that the continuing moderation in natural gas pricing was due to “abundant natural gas supplies converging with weak demand driven by an 8% decline in industrial sector consumption”.
However, while 2009 natural gas prices were likely to average about $4.13/mcf, prices were forecast to rise by more than 5% next year to average $5.21/mcf for 2010 “as expected economic growth boosts industrial consumption of natural gas”.
The price and availability of natural gas is of particular concern to US chemical makers because natural gas is a principal feedstock for the nation’s petrochemicals producers.
The administration noted that world crude oil and liquid fuels consumption remains below year-ago levels because of the worldwide economic downturn.
Despite that lower consumption rate, the agency said, “oil prices rose for the third consecutive month in May, driven in part by expectations of a global economic recovery and future increases in oil consumption”.
Although total natural gas consumption was expected to decline by 2.2% in 2009, the administration said it expected
The outlook said that US LNG imports this year were expected to reach 495bn cubic feet (bcf), a gain of 40.6% from 2008 LNG imports of 352 bcf.
($1 = €0.72)
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