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Department of Energy predicts oil prices near $30 per barrel in 2003
Petroleum News Alaska Staff
July oil prices remained relatively high, averaging close to expectations, with the average spot West Texas Intermediate price for July approximately $27 a barrel, the U.S. Department of Energy’s Energy Information Administration said in its August short-term energy outlook.
Over the next year and a half, the agency said, “we think that likely scenarios for OPEC and non-OPEC output growth imply continued tightening of markets (lower commercial inventories) and continued support for crude oil prices near or slightly above current levels through mid-2003.”
The EIA said it expects the average spot price for West Texas Intermediate “to edge upward toward $30 per barrel by early to mid 2003” if its base case assumptions hold.
Gasoline price increase small An increase in average U.S. gasoline pump prices — up some 1.5 cents per gallon — was the first monthly increase since April, the agency said, but the average price ($1.38-$1.40 a gallon for regular gasoline) has remained stable since April.
“Since we expect some gradual increases in crude oil prices in the near term, some additional growth in pump prices may materialize in August and September as suppliers gear up toward Labor Day and the end of the peak driving season,” the EIA said.
But the agency expects only modest increases, “perhaps a few cents per gallon, at most,” unless there are “significant refinery problems.”
In April, the EIA said, it projected an average summer (April to September) regular gasoline price of $1.46 a gallon. “Our best guess at this point is that the summer average will end up at about $1.40 per gallon, lower than originally expected thanks to good supply availability (including strong net imports) but higher than most years due to above-average crude oil costs.”
Natural gas around $3 per mcf The spot wellhead price for U.S. natural has “been weaving above and below” $3 per thousand cubic feet since mid-March, the EIA said. A sharp price volatility in the spring and early summer months, “has recently become calmer now that the summer is more than half over and a clearer picture of the likely winter storage situation emerges.”
The agency said that while working gas in underground storage has been above the previous five-year average since the beginning of the year, by the end of July the storage level was some 15 percent higher than last year and about 17 percent above the previous five-year average for July.
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