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EIA short-term forecast predicts lower natural gas prices Temporary gains in Alaska crude oil production, slower declines in Lower 48, expected to keep nationwide levels steady through 2002
Petroleum News Alaska
Spot natural gas prices fell to below $4 per thousand cubic feet at the beginning of May due to high levels of natural gas storage injections in April and May and lower levels of demand, the U.S. Department of Energy’s Energy Information Administration said June 7 in its short-term energy outlook.
The EIA said relatively mild weather in most of the Lower 48 and lost demand in the industrial and utility sections were contributing factors, with electric utility demand for natural gas estimated to have fallen by an average of about 16 percent in the first five months of 2001 from year-ago levels, as electric utilities turned away from natural gas in favor of other fuels due to high prices.
While overall natural gas spot prices are down from spikes in December and January, the EIA said the southern California border prices remain the highest in the nation, averaging $12 per thousand Btu in May. Gasoline prices to fall gradually Regular gasoline prices averaged $1.68 per gallon at the beginning of June, and the EIA said expected continued improvement in gasoline supply should lead to gradually falling prices over the remainder of the summer.
The U.S. average imported crude oil price in May was about $25.50 per barrel, up $3 per barrel from April levels, while the U.S. benchmark West Texas Intermediate crude oil price averaged about $29 per barrel. The OPEC basket price, which tracks closely with the imported crude oil price, averaged about $26 per barrel.
The EIA said it expects oil prices this summer to rise by $2-$3 per barrel from May levels, driven by low world oil inventories and OPEC decisions to restrict further production. With no major changes in OPEC behavior expected for 2002, the U.S. average imported crude oil price could fluctuate near $25-$27 per barrel for most of 2002. Temporary crude gains from Alaska U.S. crude output is expected to hold steady at about year 2000 levels through 2002, the EIA said, due to some temporary gains in output from Alaska and comparatively small declines in Lower 48 output.
In 2002, Alaska is expected to account for 17.6 percent of total U.S. oil production. Alaska’s oil production is expected to increase by 4.2 percent in 2001 and increase again by 1.6 percent in 2002.
The 2001 increase is from two fields, Alpine and the Aurora satellite at Prudhoe Bay. Alpine averaged its expected peak of 80,543 barrels per day during March, the EIA said, and Aurora peak production should occur late this year.
The agency said it does not expect Northstar to begin production until early 2002, with a peak rate of 65,000 barrels per day later that year.
Kuparuk River field production, including West Sak, Tabasco and Tarn, is expected to average 214,000 BPD in 2001 and 222,000 BPD in 2002.
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