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EIA expects crude to remain in OPEC target range through 2003 U.S. natural gas prices could drop if summer temperatures cool; spot wellhead price has been above $3 per mcf since March Petroleum News Alaska
June marked the fourth consecutive month the Organization of Petroleum Exporting Countries’ basket price of crude oils has averaged above $22 per barrel, the U.S. Department of Energy’s Energy Information Administration said July 8 in its short-term forecast.
The EIA said world oil price markers fell in June, with both Brent crude oil and the OPEC basket prices averaging $1-$1.50 per barrel below May averages.
The basket price has been above $22 per barrel since March 8 and the EIA said it is projected to remain within the target range of $22-$28 per barrel through 2003.
Moderate OPEC restraint, the agency said, combined with accelerating world demand growth later in 2002 and into 2003 is expected to maintain elevated prices. The U.S. benchmark West Texas Intermediate oil price averaged almost $2 per barrel lower in June than in May but WTI prices were rising at month’s end and averaged more than $1 per barrel higher than the June average of $25.50 per barrel during the first week of July.
The EIA’s base case projection for WTI in 2002 is almost $26 per barrel, rising to just above $29 in 2003.
Natural gas market volatile EIA said spot wellhead prices for U.S. natural gas have generally stayed above $3 per thousand cubic feet since March, although the market has been fairly volatile over the last several months with spot gas prices bounding up or down by as much as 25 cents per thousand cubic feet on a daily basis.
Weather forecasts and underground storage reports are two factors that have had an exaggerated effect on the spot price of gas, the agency said.
Working gas in underground storage has remained at unusually high levels for the past several months. Since the lack of underlying demand strength and excess gas in storage have failed to keep prices below $3 mcf for three months now, the EIA said it is projecting prices to remain in the $2.90 to $3.20 per mcf range for the remainder of the summer.
Relatively cool weather in the third quarter could bring sharply lower prices later this summer, the EIA said.
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