13 October 2010 17:57 [Source: ICIS news]
WASHINGTON (ICIS)--The US Department of Energy (DOE) on Wednesday said it expects average domestic natural gas prices to be lower this year and in 2011 than earlier forecast because near-record gas inventories and high production offset increased consumption.
In its monthly short-term energy outlook, the department’s Energy Information Administration (EIA) said it expects the average US Henry Hub annual average spot price to be $4.47/MMBtu for this year and climb to $4.58MM/Btu on average for 2011.
Those estimates are below the forecast the EIA issued last month for an average Henry Hub spot price of $4.54/MMBtu for 2010 and $4.76/MMBtu on average for 2011.
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For 2011, the administration said it expects
The availability and price of natural gas is of concern to US petrochemical producers and downstream chemical manufacturers because the industry is heavily dependent on natgas as both a feedstock and power fuel.
The EIA said that despite this year’s expected increase in consumption, its 2010 average price forecast was lower than last month’s outlook because the
“This projected volume will be about 3% lower than last year’s record-setting level but will still represent the second-highest underground storage level on record for the month of October,” the agency said.
In addition, marketed natural gas production in the Lower-48 states is expected to increase by 3.5% this year, according to the EIA, chiefly on the strength of a higher rig count and a “growing share of natural-gas-directed horizontal drilling rigs in the Lower-48 states”.
In contrast to gas pricing, the EIA said it expects the cost of benchmark US West Texas Intermediate (WTI) crude oil to advance this year and next as global economic growth drives increased oil consumption.
The administration forecasts WTI to average about $80/bbl over the North American winter season (November through March), an increase of $3/bbl from its September outlook estimate.
The EIA said it expects the average WTI price will rise gradually next year to reach $85/bbl by the fourth quarter 2011, also a $3/bbl increase from its month-earlier forecast.
However, those gains in the WTI crude average price for this year and next would be driven more by economic growth in Asia, the Middle East and
The EIA joined other government and private sector analysts in saying that the US economic recovery is slowing, revising downward its forecast for
“EIA’s forecast assumes US GDP grows by 2.6% in 2010 and 2.1% in 2011, while world oil-consumption-weighted GDP grows by 3.8% and 3.3%, respectively, in 2010 and 2011,” the outlook said.
Just a month ago, the EIA had predicted
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