Short-Term Energy Outlook
EIA released its U.S. monthly projections through December 2011. Highlights for this month’s Outlook include:
- Crude oil prices fluctuated considerably last month, with the West Texas Intermediate (WTI) spot price ranging from a high of $86 per barrel on May 3 to a low of $65 on May 25, before ending the month at $74. According to some market analysts, uncertainty over the global economic recovery, particularly with respect to Europe’s debt crisis and the tightening of credit by China, and liquidation of futures contracts contributed to the crude price decline. Moreover, WTI prices fell further than most other crudes because of record high inventories in Cushing, Oklahoma. EIA projects WTI crude oil spot prices will average $79 per barrel this year and $83 per barrel in 2011, both about $3 lower than in last month’s Outlook.
- EIA forecasts that regular-grade motor gasoline retail prices will average $2.79 per gallon during this summer's driving season (the period between April 1 and September 30), up from $2.44 per gallon last summer. The summer gasoline price forecast is down considerably ($0.15) from last month’s Outlook primarily as a result of the lower crude oil price forecast.
- Based on the current Atlantic hurricane season outlook from the National Oceanic and Atmospheric Administration (NOAA), EIA estimates median outcomes for total shut-in production in the Federally-administered Gulf of Mexico during the upcoming hurricane season (June through November) of 26 million barrels of crude oil and 166 billion cubic feet (Bcf) of natural gas. Actual shut-ins are likely to differ significantly from this expectation depending on the number, track, and strength of hurricanes as the season progresses.
- This Outlook includes EIA’s preliminary estimates of reductions in production resulting from a 6-month deepwater drilling moratorium announced by Secretary Salazar on May 27. The reductions in crude oil production resulting from the moratorium are estimated to average about 26,000 barrels per day (bbl/d) in the fourth quarter of 2010 and roughly 70,000 bbl/d in 2011. EIA will refine its moratorium impacts as additional information becomes available.
- EIA expects the Henry Hub natural gas spot price to average $4.49 per million Btu (MMBtu) this year, a $0.54-per-MMBtu increase over the 2009 average. EIA expects the Henry Hub spot price to average $5.06 per MMBtu in 2011, down $0.28 per MMBtu from last month's Outlook.
- The annual average residential electricity price changes only moderately over the forecast period, averaging 11.6 cents per kilowatthour (kWh) in 2010, up slightly from 11.5 cents per kWh in 2009, and rising to 11.9 cents per kWh in 2011.
- Estimated U.S. carbon dioxide (CO2) emissions from fossil fuels, which declined by 7.0 percent in 2009, are expected to increase by 2.9 percent and 1.4 percent in 2010 and 2011, respectively, as economic growth spurs higher energy consumption.
