WASHINGTON (ICIS news)--The average price of US benchmark crude oil this year will be sharply higher than the amount estimated just a month ago, and the forecast cost of natural gas also is being revised upward, top Energy Department officials said on Tuesday.
The Energy Information Administration (EIA) said that it now expects the average cost of West Texas Intermediate (WTI) crude to be $94/bbl for 2008 as a whole.
That forecast represents a 9.3% increase from the short-term energy outlook that the administration issued on 12 February and reflects the continuing climb in oil prices that were closing in on $109/bbl earlier on Tuesday on the New York Mercantile Exchange (NYMEX).
The administration said its upwardly revised forecast for WTI prices this year is due to Tight fundamentals, reflected by low available crude oil surplus production capacity combined with supply concerns in several oil exporting countries .
However, the administration said it is forecasting a decline in crude prices to $86/bbl on average for next year, but that estimate also represents an increase from the agency s month-earlier forecast of $82/bbl on average for 2009.
The outlook over the next two years points to some easing of the oil market balance due to increased production outside of the Organization of Petroleum Exporting Countries (OPEC) and planned additions to OPEC capacity, the administration said in support of its prediction of a crude price decline for next year.
Even so, the EIA noted that delays to capacity additions in both OPEC and non-OPEC nations could alter the outlook as could OPEC production decisions .
In natural gas - which is a key feedstock for US chemicals manufacturers - the administration said it expects the average for Henry Hub spot prices to be $8.18/m Btu this year, an increase of 4.5% over the agency s February estimate of $7.83/m Btu.
The administration also raised its outlook for the 2009 average natgas price to $7.95/m Btu from its month earlier forecast of $7.93/m Btu.
The average wellhead price for US natural gas was $2.19/m Btu in 1999.
The EIA said US consumption of natural gas is expected to reach a record 23,400bn cubic feet (bcf) in 2009, chiefly due to increased use of gas to generate electric power, which grew more than 10% in 2007.
The Energy Information Administration (EIA) said that it now expects the average cost of West Texas Intermediate (WTI) crude to be $94/bbl for 2008 as a whole.
That forecast represents a 9.3% increase from the short-term energy outlook that the administration issued on 12 February and reflects the continuing climb in oil prices that were closing in on $109/bbl earlier on Tuesday on the New York Mercantile Exchange (NYMEX).
The administration said its upwardly revised forecast for WTI prices this year is due to Tight fundamentals, reflected by low available crude oil surplus production capacity combined with supply concerns in several oil exporting countries .
However, the administration said it is forecasting a decline in crude prices to $86/bbl on average for next year, but that estimate also represents an increase from the agency s month-earlier forecast of $82/bbl on average for 2009.
The outlook over the next two years points to some easing of the oil market balance due to increased production outside of the Organization of Petroleum Exporting Countries (OPEC) and planned additions to OPEC capacity, the administration said in support of its prediction of a crude price decline for next year.
Even so, the EIA noted that delays to capacity additions in both OPEC and non-OPEC nations could alter the outlook as could OPEC production decisions .
In natural gas - which is a key feedstock for US chemicals manufacturers - the administration said it expects the average for Henry Hub spot prices to be $8.18/m Btu this year, an increase of 4.5% over the agency s February estimate of $7.83/m Btu.
The administration also raised its outlook for the 2009 average natgas price to $7.95/m Btu from its month earlier forecast of $7.93/m Btu.
The average wellhead price for US natural gas was $2.19/m Btu in 1999.
The EIA said US consumption of natural gas is expected to reach a record 23,400bn cubic feet (bcf) in 2009, chiefly due to increased use of gas to generate electric power, which grew more than 10% in 2007.
