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EIA sees spot WTI crude at near $30 through 2001
Petroleum News Alaska
Barring a sharp drop in world oil consumption below current expectations, the Department of Energy’s Energy Information Administration said Feb. 6, no compelling case for rapidly declining oil prices emerges from the world oil market outlook.
The EIA said it expects the West Texas Intermediate crude oil spot price average to remain near $30 a barrel for the rest of the year, with prices likely to drift downward some, perhaps losing $1 per barrel between 2001 and 2002. Gas price drop unexpected Natural gas spot prices were lower in late January than anticipated, the EIA said, citing a combination of new supply, demand cutbacks due to fuel substitution, industrial slowdowns and conservation improved natural gas storage by the end of January, up some 140 billion cubic feet from what the EIA anticipated last month.
“Despite the improvement, gas prices remain quite sensitive to weather shifts and storage remains well below normal,” the EIA said.
The monthly average U.S. imported crude oil price in January was about $25.25 a barrel (almost $30 a barrel for WTI crude), slightly higher than the December price and the EIA said it expects that oil stocks in the OECD countries will continue to be tight compared to normal levels and provide enough support to prevent prices from falling significantly.
Price declines in December and January had indicated weakness in the near-term market, the EIA said, but it now believes that OPEC’s decision to cut oil production quotas effective Feb. 1 will provide enough support to maintain the OPEC basket oil price within OPEC’s target range of $22-$28 per barrel in 2001 and 2002.
The EIA expects world oil demand to continue to grow, despite concerns over a gradual economic slowdown in industrialized countries.
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