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Agency expects crude oil prices to ebb by mid summer Energy Information Administration says in short-term forecast that gasoline supply/demand balance will be tight this summer Petroleum News Alaska
The Energy Information Administration said it expects retail gasoline prices for regular grade to average $1.46 per gallon, 25 percent higher than last summer’s average of $1.17 per gallon. Prices are expected to peak at $1.52 a gallon in April and decline steadily to $1.39 a gallon by September because of increases in worldwide crude oil production, the agency said in a short-term energy outlook issued April 6.
The agency projects gasoline demand this summer to average 8.72 million barrels per day, up 130,000 barrels per day, or 1.5 percent, from last summer, a new summer season record but with growth below the average of the previous five years. Motor gasoline stocks are currently low by historical standards with beginning-of-season (April 1) stocks sharply below last year’s levels and near the low end of the normal range.
Crude oil prices to begin ebbing by mid-year The agency said it expects world oil prices to begin a gradual decline as increased oil production from OPEC enters the world oil market.
Based on its assessment of world oil supply and demand, the average cost per barrel of crude oil imported into the United States and delivered to U.S. refiners (the benchmark price used in the forecast) is expected to decline from an estimate of $26.75 per barrel in February and March 2000 to about $25 per barrel by June 2000 and to $23.50 per barrel by the end of 2000. The price is expected to continue to decline to about $21.50 by the end of 2001.
Natural gas demand is expected to increase by 3.5 percent and 4.1 percent, respectively, to 22.17 trillion cubic feet in 2000 and 23.08 trillion cubic feet in 2001. These increases follow the less than 1 percent growth seen in 1999, when oil prices remained reasonably competitive with gas used in electric power and industrial production and when strong nuclear power and hydroelectric power increases backed out gas use in the electric power industry.
Assuming normal weather for the remainder of the forecast, the outlook for total electricity demand in 2000 is growth of 2 percent. In 2001, electricity demand is expected to grow by an additional 2.1 percent. This is on track with average electricity growth between 1990 and 1998, which was about 2 percent per year.
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