Short-Term Energy Outlook February 8, 2011 Release
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Short-Term Energy Outlook
February 8, 2011 Release
EIA expects the price of WTI crude oil to average about $93 per barrel in 2011, $14 higher than the average price last year. For 2012, EIA projects that WTI prices will continue to rise, averaging $98 per barrel. EIA's forecast assumes U.S. real gross domestic product (GDP) grows 3.0 percent in 2011 and 2.8 percent in 2012, while world real GDP (weighted by oil consumption) grows by 3.9 percent and 4.0 percent, respectively, in 2011 and 2012.
§ EIA expects regular-grade motor gasoline retail prices to average $3.15 per gallon in 2011, 37 cents per gallon higher than the 2010 average, and $3.30 per gallon in 2012, with prices forecast to average about 5 cents per gallon higher in each year during the peak driving season (April through September). There is regional variation in the forecast, with average expected prices on the West Coast about 25 cents per gallon above the national average during the peak driving season. There is also significant uncertainty surrounding the forecast, with the current market prices of futures and options contracts for gasoline suggesting a 35 percent probability that the national monthly average retail price for regular gasoline could exceed $3.50 per gallon during summer 2011 and about a 10 percent probability that it could exceed $4.00 per gallon. Rising crude oil prices are the primary reason for higher retail prices, but higher refining margins are also expected to contribute.
EIA estimates that natural gas working inventories ended January 2011 at 2.3 trillion cubic feet (Tcf), about 30 billion cubic feet (Bcf) or 1 percent below the 2010 end-of-January level. Inventories are expected to remain high through 2011. The projected Henry Hub natural gas spot price averages $4.16 per million Btu (MMBtu) for 2011, $0.22 per MMBtu lower than the 2010 average. EIA expects the natural gas market to begin to tighten in 2012, with the Henry Hub spot price increasing to an average of $4.58 per MMBtu.
EIA forecasts average household expenditures for space-heating fuels to total $991 during this 2010-2011 winter season, $24 higher than last year. EIA projects higher expenditures for heating oil and propane, flat expenditures for electricity, but lower expenditures for natural gas. A forecast of milder weather in the South and the West compared with the 2009-2010 winter leads to lower fuel consumption in those areas.
To see details of this forecast update, go to the following World Wide Web site on the Internet: