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Short-Term Energy Outlook February 7, 2012

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Highlights

   

  • EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $100 per barrel in 2012, almost $6 per barrel higher than the average price last year.  Based on recent futures and options data, the market believes there is about a one-in-fifteen chance that the average WTI price in June 2012 will exceed $125 per barrel, and about a one-in-fifty chance that it would exceed $140 per barrel.  For 2013, EIA expects WTI prices to continue to rise, reaching $106 per barrel in the fourth quarter of next year.  EIA’s forecast assumes that U.S. real gross domestic product (GDP) grows by 2.0 percent in 2012 and 2.4 percent in 2013, while world real GDP (weighted by oil consumption) grows by 2.9 percent and 3.7 percent in 2012 and 2013, respectively.
  • This is the third consecutive monthly Outlook in which the forecast of average household expenditures for heating fuels has been lowered because of the continuing unusually warm weather for most of the Nation.  Average household heating oil expenditures are now expected to increase by only 1 percent this winter heating season (October 1 to March 31) compared with last winter.  Natural gas and propane expenditures are projected to decline by 11 percent and 5 percent, respectively, and electricity expenditures are 4 percent lower than last winter’s levels.
  • EIA expects regularā€grade motor gasoline retail prices to average $3.55 per gallon in 2012, compared with $3.53 cents per gallon last year, a nd then average $3.59 per gallon in 2013.  During the April through September peak driving season each year, prices are forecast to average about 7 cents per gallon higher than the annual average.  Recent options and futures price data imply that the market believes that there is about a one-in-four chance that the U.S. average pump price of regular gasoline could exceed $4 in June of this year.
  • Natural gas working inventories continue to set new record seasonal highs and ended January 2012 at an es timated 2.86 trillion cubic feet (Tcf), about 24 percent above the same time last year.  EIA’s average 2012 Henry Hub natural gas spot price forecast is $3.35 per million British thermal units (MMBtu), a decline of about $0.65 per MMBtu from the 2011 average spot price.  EIA expects that Henry Hub spot prices will average $4.07 per MMBtu in 2013.

 http://www.eia.gov/forecasts/steo/

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