06 December 2011 18:30 [Source: ICIS news]
WASHINGTON (ICIS)--Global crude oil prices are likely to increase next year because of tensions in oil-producing regions in the Middle East and ?xml:namespace>
In its monthly short term energy outlook (STEO), the department’s Energy Information Administration (EIA) said it expects the
Those two forecasts are higher by $1 and $2 respectively than the EIA’s outlook of just a month ago.
The reason for the upward revision, said the administration, is uncertainty about stability among key producers.
“Tension in the oil-producing regions of the Middle East and
That upward pressure on oil prices, however, has been offset somewhat “by the restoration of Libyan oil output, which has thus far exceeded our prior expectations”.
While the administration anticipates increasing crude prices for the year ahead, the EIA analysis also notes that other factors could reverse that upward trend.
“At the same time, downside demand risks persist, stemming from fears about weakening global economic growth and the contagion effects of the European Union’s debt crisis,” the outlook said.
For natural gas, the EIA has sharply lowered its pricing forecast, especially for next year.
For the nearly concluded 2011, the administration is predicting a full-year average price at the Henry Hub of $4.02/MMBtu. Last month, EIA had predicted a 2011 average price of $4.09/MMBtu.
The administration noted that its new natgas price average for this year is $0.37/MMBtu lower than the 2010 average.
And EIA is anticipating an even sharper decline in US natgas prices in 2012, averaging $3.70/MMBtu for next year. That forecast marks a $0.32/MMBtu drop from the expected average for this year, and the administration’s 2012 natgas price outlook is fully $0.43/MMBtu below its month-earlier prediction.
The price and availability of natural gas is of concern to US petrochemical producers and downstream chemical makers because they are heavily dependent on natural gas as both a feedstock and power fuel.
Driving the decline in natural gas pricing outlooks are increasing domestic production and record inventories, the administration said.
US natural gas working inventories at the end of November were at a record high for that period, about 1% above the year-earlier period.
And while US consumption of natural gas is forecast to increase by 1.7% in 2012 – chiefly due to increasing use of natgas in the industrial and electric power sectors – domestic production this year will be 6.6% ahead of 2010 and will see a further 2.8% gain in 2012.
Those production gains are attributed to higher onshore production in the lower 48 states, which more than offsets a 20% year-on-year decline in gas production from US waters in the
Because of increasing domestic production, the EIA said US imports of natural gas will show a 6.5% decline this year and another 3.6% drop in 2012.
($1 = €0.75)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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