09 November 2010 19:49 [Source: ICIS news]
WASHINGTON (ICIS)--US oil prices are expected to rise over the North American winter months as the US economic recovery and other nations’ growth generate renewed crude demand, the Department of Energy said on Tuesday.
However, US natural gas prices are expected to be lower than prior forecasts for both this year and 2011.
In its monthly short-term energy outlook (STEO), the department’s Energy Information Administration (EIA) said it was raising its pricing forecast for the benchmark US West Texas Intermediate (WTI) crude oil to $83/bbl for the winter period of 1 October to 31 March, an increase of $3 from its month-earlier prediction.
In last month’s outlook, the administration had predicted the average winter season WTI price would be $80/bbl.
In addition, the EIA said it expects WTI prices to rise gradually to $87/bbl by the fourth quarter of 2011, compared with its earlier $85/bbl forecast, citing improving economic conditions in the ?xml:namespace>
The administration said it held to its month-earlier forecast of
However, the department’s energy analysts raised slightly their outlook for US 2011 GDP growth to 2.2% from last month’s 2.1% forecast, although the revised figure still shows a slower rate of growth compared with this year’s expected output.
In contrast to crude, the EIA forecasts lower
The outlook said that natural gas working storage inventories had reached more than 3,800bn cubic feet (bcf), about the same as last year’s record-setting level for the end of October.
EIA lowered its forecast for Henry Hub natural gas spot price averages to $4.35/MMBtu for 2010, down from last month’s prediction of $4.47/MMBtu.
The Henry Hub spot price is expected to average $4.31/MMBtu in 2011, lower by 27 cents than the administration’s month-earlier forecast of $4.58/MMBtu.
Gas prices are expected to fall in 2011 in part because cooler weather forecast for next year’s North American summer months would reduce air-conditioning electricity demand by 16%.
Although commercial and residential gas consumption was expected to remain flat in 2010 compared with 2009, a slight increase in demand for both consuming sectors was forecast for 2011.
Were it not for the predicted slower GDP growth in 2011, the administration indicated that the
The EIA said that domestic
“The relatively greater decline in GOM production in 2011 is due to an estimated 90 bcf of less production because of the 2010 drilling moratorium and the projected increase in hurricane-induced production outages of about 30 bcf in the GOM next year compared with a relatively calm hurricane season this year,” the administration said.
($1 = €0.72)
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