07 September 2011 20:18 [Source: ICIS news]
WASHINGTON (ICIS)--The Department of Energy (DOE) on Wednesday cut its forecast for ?xml:namespace>
The department’s data and analysis arm, the Energy Information Administration (EIA), said in its September short term energy outlook (STEO) that it expects US refiners will pay an average of $103/bbl for crude oil in 2012, down from its month-earlier forecast of $107/bbl.
However, the administration maintained its estimate of an average
In natural gas – on which US petrochemical producers and downstream chemical makers are heavily dependent for feedstock and power fuel – the administration lowered its forecast for prices for both this year and next.
For full-year 2011, the EIA said it expects the average Henry Hub spot price for natural gas to be $4.20/MMBtu, down from the administration’s August estimate of $4.24/MMBtu.
In 2012, the administration forecasts the average Henry Hub spot price will be $4.30/MMBtu, down by 11 cents from its month-earlier estimate of $4.41/MMBtu.
The department said it was lowering its pricing forecasts because the “EIA’s economic growth assumptions have been lowered substantially compared with last month’s Outlook”.
“This forecast assumes that US gross domestic product (GDP) grows by 1.5% this year and 1.9% next year,” said the EIA, noting that just a month ago it had put US 2011 GDP expansion at 2.4% and the 2012 GDP output gain at 2.6%.
But the department cautioned that even its newest estimates and forecasts could be subject to change.
“The inherent uncertainty of the revised price forecast is evidenced by the various shocks to oil supply, demand and prices that have occurred this year,” EIA said.
“Upside risks to the crude oil price outlook remain, particularly due to ongoing unrest in oil-producing regions and the possibility that non-OECD demand will be more resilient than expected,” the outlook said, referring to possible increases in energy demand among the 34 industrialised nations that make up the Organisation for Economic Cooperation and Development (OECD).
But the department anticipates that downward pressure on energy prices is more likely.
“Downside risks arguably predominate, as fears persist about the rate of global economic recovery, contagion effects of the debt crisis in the European Union, and other fiscal issues facing national and sub-national governments,” the administration said.
($1 = €0.72)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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