EIA expects $68 WTI spot price ’06-’07

The U.S. Department of Energy’s Energy Information Administration expects the West Texas Intermediate crude oil spot price to average $68 in both 2006 and 2007, the agency said in its June short-term energy outlook issued June 6.

It projects lower natural gas prices the rest of this year compared to 2005, with a 2006 Henry Hub spot price average of $7.74 per thousand cubic feet, down $1.12 from the 2005 average. “For 2007, the Henry Hub average price will likely move back up to average $8.81 per mcf, assuming sustained oil prices, normal weather and continued economic expansion in the United States,” EIA said.

U.S. natural gas consumption is projected to fall some 0.9 percent below 2005 levels this year and then increase by 3.8 percent in 2007.

There was a 2.7 percent drop in domestic natural gas production in 2005, largely due to hurricane-induced disruptions in the Gulf of Mexico; production is expected to increase 0.7 percent in 2006 and 1.2 percent in 2007. Total liquefied natural gas net imports are expected to increase from 631 billion cubic feet in 2005 to 710 bcf in 2005 and 950 bcf in 2007.

As of May 26, working natural gas storage was estimated at 2.243 trillion cubic feet, 477 bcf above a year ago and 706 bcf above the five-year average.

Consumption growth has slowed

“Because of only limited surplus capacity throughout the forecast period, continued concern about potential or existing supply problems in Nigeria, Iran, Iraq, Venezuela and elsewhere, as well as the threat of more hurricane damage and the continued tight supply-demand balance, we expect little change in the current high-price market,” EIA said.

—Petroleum News