08 September 2010 19:05 [Source: ICIS news]
WASHINGTON (ICIS)--The US Department of Energy (DOE) on Wednesday lowered its forecasts for oil and natural gas prices for the balance of this year and 2011, citing reduced expectations for ?xml:namespace>
The department said it expects the average price for
For 2011, the department expects global crude prices will average $82/bbl, a forecast that was $2 lower than its month-earlier prediction.
In its monthly short-term energy outlook (STEO), the department’s Energy Information Administration (EIA) said that it projected Henry Hub natural gas spot prices to average $4.54/MMBtu for the full-year 2010, down by $0.15 from last month’s forecast.
In 2011, the Henry Hub average spot price was expected to be $4.76/MMBtu, the administration said, lower by $0.22 from its August outlook of $4.98/MMBtu.
For both oil and natural gas pricing, the department said that “These projections reflect updated expectations for economic activity, with forecasted US real gross domestic product (GDP) growth of 2.8% in 2010 and 2.3% in 2011”.
In last month's outlook, EIA had predicted US GDP expansion for this year at 3.1% and at 2.7% in 2011.
The EIA’s lowered pricing forecasts for US crude and natural gas came in the wake of Commerce Department reports showing that second quarter US GDP growth was only 1.6% instead of the earlier output estimate of 2.4%.
In addition, the administration said it is lowering its outlook for recovery-driven global demand for energy.
“The 2011 world oil-consumption-weighted real GDP growth rate is also lowered, to 3.3% from the 3.6% level in last month’s outlook,” the EIA said.
However, the department indicated that it did not expect moderating oil and natural gas prices to last long.
“Despite a slight reduction in forecast global demand growth and the drop in world oil prices in recent weeks, the projected gradual reduction in global oil inventories over the forecast period should lend support to firming oil prices,” the administration said.
Similarly, the EIA indicated potential pressure for US natural gas prices, noting that domestic gas consumption is expected to increase 4% this year compared with 2009 while US output of natural gas is forecast to be 2.1% ahead of the 2009 level.
However, while domestic
LNG imports are predicted to average 1.25bn cubic feet (bcf) per day this year, revised downward from last month’s outlook for 1.35 bcf. In 2011, LNG imports are expected to ease to 1.32 bcf compared with the month-earlier forecast of 1.42 bcf.
($1 = €0.79)
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