08 June 2010 19:09 [Source: ICIS news]
WASHINGTON (ICIS news)--The US Department of Energy (DOE) on Tuesday lowered its outlook for crude oil pricing for the rest of this year and into 2011, citing uncertainty over the global economic recovery, especially in Europe and China.
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In its monthly short-term energy outlook (STEO), the department said it expected that the spot price for benchmark
The department’s new 2010 WTI price estimate was $5 below the forecast it issued just last month, and its 2011 price guess was $4 less than its May figure.
The Energy Information Administration (EIA), the department’s information and analysis arm, cited “uncertainty over the global economic recovery” as a reason for the reduced crude price outlook.
In particular, EIA said the ongoing European debt crisis and the tightening of credit in
In natural gas, the administration said it expected the average Henry Hub spot price to be $4.49/MMBtu this year, a forecast that was essentially unchanged from the May outlook of $4.48/MMBtu.
The 2010 full-year natural gas price forecast was about 54 cents/MMBtu higher than the 2009 average price.
But in 2011, the EIA expected the average Henry Hub price for natural gas to climb to $5.06/MMBtu. At that price level, it would represent another gain of about 50 cents/MMBtu compared with the forecast average 2010 price.
However, the new outlook's estimate of $5.06/MMBtu for natural gas next year was lower by 28 cents from the administration’s 2011 estimate of $5.34/MMBtu just a month ago.
The EIA explained that low 2010 gas prices would contribute to a decline in natural gas drilling activity over the next several months.
“As a result, the current 2011 forecast of higher prices comes as production begins to decline later this year and next,” the administration said.
In its new outlook, the department offered its first estimate of lost
The EIA said that it expected domestic crude oil production would be reduced by 780,000 bbl/month in the fourth quarter this year and by 2m bbl/month in early 2011.
The forecast reduction of some 2m bbl/month would represent a 1% cut in overall US domestic oil production, which was running at about 170m bbl/month from all sources prior to the 20 April BP-operated oil rig explosion in the Gulf.
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