|
EIA projects $63 WTI in ’06, $60 in ‘07 Henry Hub natural gas prices expected to grow from $9 per mcf in ‘05 to $9.80 per mcf in ‘06, and back down to $8.84 in ‘07 Petroleum News
The U.S. Department of Energy’s Energy Information Administration is projecting an average price of $63 per barrel for West Texas Intermediate crude oil in 2006, with the average price dropping to $60 per barrel in 2007. WTI averaged $56 per barrel in 2005, the agency said Jan. 10 in its short-term energy outlook.
Retail prices for regular gasoline, which averaged $2.27 per gallon in 2005, are projected to average $2.41 in 2006 and $2.33 in 2007, the agency said.
Henry Hub natural gas prices, which averaged $9 per thousand cubic feet in 2005, are projected to average $9.80 per mcf this year, and $8.84 per mcf in 2007.
The agency said that recovery from hurricanes Katrina and Rita continues as expected, with 27.4 percent of normal daily federal Gulf of Mexico oil production and 19.5 percent of federal Gulf natural gas production remaining shut-in at the beginning of January. Only one refinery, in New Orleans, remains out of service and it is projected to return to operation in the first quarter, but some refineries are still operating below normal capacity.
Households are expected to spend an average of 35 percent more this winter than last to heat with natural gas, 23 percent more for heating oil, 17 percent more for propane and 10 percent more for electricity. “Should colder-than-normal weather prevail, expenditures could be significantly higher than currently projected,” the agency said. World oil demand growth to increase The agency said it expects the oil price trend of the last two years — a steady increase — “to slow and even turn around, although dramatic reductions are not anticipated.”
2006-07 oil markets will continue to be affected by factors seen in 2005: low spare production capacity and rapid demand growth. Other factors which are less certain include frequency and intensity of hurricanes and other extreme weather and geopolitical instability.
The agency said world oil demand growth is expected to increase from 1.2 million barrels per day in 2005 to 1.6 million bpd in 2006, largely because U.S. demand growth is expected to recover. U.S. demand had a net decline in 2005 and is expected to grow by 410,000 bpd in 2006. Demand growth is projected to increase to 1.9 million bpd in 2007 due to economic growth in developing Asian countries excluding China, with Chinese demand growth expected to stay on an overall annual trend of about 500,000 bpd.
World spare oil production capacity is also projected to increase in 2006-07, both from OPEC and non-OPEC sources. “This increase in spare capacity is expected to ease the current tightness in world oil markets and moderate the world oil price increases seen during the past year,” the agency said.
Non-Organization of Petroleum Exporting Countries supply grew by an average of 800,000 bpd between 1995 and 2005 and is expected to grow by an average of 900,000 bpd in 2006 and by 1.7 million bpd in 2007. The agency said this non-OPEC supply “hinges on the U.S. forecast, and whether a repeat hurricane scenario next summer takes out production in the Gulf of Mexico again.”
Outside the United States the agency expects non-OPEC net production increases of 100,000-200,000 bpd in 2006 in the Caspian, Canada, Angola, Russia, Brazil and Mexico.
Large increases are expected in 2007 with new projects of almost 500,000 bpd in Angola, almost 400,000 bpd in the Caspian and more than 200,000 bpd each in Brazil and Canada.
| 