US says crude to average $93/bbl this year, $98/bbl in 2012

08 February 2011 20:10  [Source: ICIS news]

WASHINGTON (ICIS)--The price of US benchmark crude oil West Texas Intermediate (WTI) is expected to average $93/bbl for this year, the Department of Energy (DOE) said on Tuesday, and then edge up to $98/bbl in 2012 as the US recovery continues.

The department’s Energy Information Administration (EIA) noted that its predicted $93/bbl average price for WTI for this year represents a $14/bbl increase over the full-year average of $79/bbl seen in 2010.

In natural gas, the administration said it was forecasting a full-year average price of $4.16/MMBtu for 2011, which would be 22 cents lower than last year’s average spot price for Henry Hub natural gas.

However, the EIA said it expects the US natural gas market to tighten in 2012, with the average Henry Hub spot price rising to $4.58/MMBtu for the full year.

Natural gas is a major feedstock for US petrochemical producers and downstream chemical makers, and the industry also depends heavily on natural gas as an energy fuel.

While US consumption of natural gas this year was expected to be flat with 2010 usage, the administration said that natural gas use would increase by 1% in 2012.

In its monthly short-term energy outlook (STEO), the administration said that in 2012, natural gas consumption by the electric power sector would increase by 2.9% and by 1.2% in the industrial sector.

Those increases would be partially offset by slight declines in residential and commercial consumption of gas, the EIA said.

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