US agency lowers crude oil forecast by $7/bbl

10 July 2012 22:34  [Source: ICIS news]

HOUSTON (ICIS)--The US Energy Information Administration (EIA) on Tuesday lowered its forecast for benchmark West Texas Intermediate (WTI) to an average of $88.00/bbl over the second half of the year, down $7.00/bbl from its projection in June.

In its monthly Short-Term Energy Outlook, the EIA also lowered its forecast for retail gasoline to $3.39/gal for the third quarter.

According to the report, US total crude oil production in 2012 is expected to average 6.3m bbl/day, up 600,000 bbl/day from the previous year, the highest level of production since 1997. Domestic production is forecast to rise to 6.7m bbl/day in 2013.

Due to rising inventories of natural gas, the average Henry Hub spot price, which averaged $4.00/MMBtu during 2011, is expected to average $2.58/MMBtu in 2012 and rise to $3.22/MMBtu in 2013.

Beginning this month, the short-term outlook will provide a forecast for global crude oil benchmark Brent. The spot price is forecast to average $106.00/bbl for 2012 and $98.00/bbl in 2013.

The debt crisis in Europe and possible weak economic growth in China are expected to lower growth in global oil demand, said the EIA.

By: Ignacio Sotolongo
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