12 June 2012 19:17 [Source: ICIS news]
WASHINGTON (ICIS)--The US Department of Energy (DOE) on Tuesday lowered its forecast for oil prices for the rest of this year to an average of $95/bbl, but said that a weakening global economic outlook could drive crude prices still lower.
In its monthly short-term energy outlook (STEO), the department’s Energy Information Administration (EIA) noted that the ?xml:namespace>
The EIA said it expects the price of WTI crude to average about $95/bbl over the second half of 2012, an estimate that is $11/bbl lower than the administration’s forecast last month.
The EIA also said it expects crude oil prices will remain relatively flat in 2013.
“This forecast rests on the assumption that US real gross domestic product (GDP) grows by 2.2% this year and 2.4% next year,” the outlook said.
Both of those GDP growth estimates are below what economists call
In addition, the administration cautioned that “recent economic and financial news that points toward weaker economic outlooks could lead to lower economic growth forecasts and further downward revisions to the EIA’s crude oil price forecasts”.
In contrast to the administration’s crude oil price forecasts, the EIA said it expects prices for
Gas prices are forecast to rise further next year, the administration said, climbing to an average of $3.23/MMBtu for 2013.
However, even those slightly higher natgas price forecasts remain well below price ranges seen just a few years ago when gas was selling in the $6-8 range and spot prices climbed toward $15.
The still moderate prices for
“Total marketed production of natural gas grew by 4.8bcf/d or 7.9% in 2011,” the administration said.
“This strong growth was driven in large part by increases in shale gas production,” the EIA said.
“While EIA expects year-over-year production growth to continue in 2012, the projected increases occur at a slower rate than in 2011 as low prices reduce new drilling plans.”
The administration cited data from Baker Hughes, showing the natural gas rig count at 588 as of 1 June, down sharply from the 2011 high of 936 rigs in October last year.
The EIA said that while demand is expected to remain fairly constant for the year ahead – with growth in gas-fired electric power generation offsetting lower residential and industrial consumption – production growth will ease, contributing to the forecast for higher gas prices in 2013.
($1 = €0.80)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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