The U.S. Energy Department reduced its crude oil price forecast for 2010 on concern that global economic growth may slow and on ample U.S. stockpiles.
West Texas Intermediate oil, the U.S. benchmark, will average $78.75 a barrel this year, down from last month’s forecast of $82.18, according to its monthly Short-Term Energy Outlook, released today. That’s 28 percent higher than the 2009 average of $61.66 a barrel.
Prices will climb 4.8 percent to average $82.50 a barrel in 2011, the report showed. The estimate for next year was down 3.5 percent from May’s report.
“The lower price forecast reflects the change in market expectations,” said Tancred Lidderdale, a government economist in Washington who supervised the monthly outlook. “Concerns about the economy have sent stock and oil prices lower, and may show up in lower demand.”
Crude oil traded on the New York Mercantile Exchange touched $87.15 on May 3, the highest level since Oct. 9, 2008, then tumbled 26 percent to $64.24 on May 20, the lowest price since July 30. Futures for July delivery rose 84 cents, or 1.2 percent, to $72.28 at 1:05 p.m.
Regular gasoline, averaged nationwide, will cost $2.79 a gallon from April through September, according to the report from the Energy Information Administration, the department’s statistical arm. The motor-fuel estimate is 14 percent higher than last summer’s average of $2.44 a gallon. The retail price is down 15 cents from last month’s forecast.
“Lower gasoline prices are good news for the consumer,” Lidderdale said.
The department cut its outlook for global oil consumption this year to 85.51 million barrels a day from 85.55 million last month. That’s up 1.8 percent from last year’s 84.01 million. Demand will climb to 87.12 million in 2011, 40,000 barrels a day lower than last month’s projection.
U.S. oil use will average 18.92 million barrels a day this year, up 230,000 barrels from 2009. This year’s forecast was increased 80,000 barrels from the May estimate.
Demand from the 30 members of the Organization for Economic Cooperation and Development will average 45.37 million barrels a day this year, the report showed. The forecast was unchanged from last month. OECD consumption will be unchanged in 2011. Next year’s estimate was down 190,000 barrels from May.
The OECD doesn’t include developing countries such as China, India and Brazil. Consumption by non-OECD countries will rise 1.49 million barrels to 40.15 million barrels a day this year. The forecast is down 40,000 barrels from last month. Demand in emerging economies will climb 1.61 million barrels to 41.76 million in 2011, the report showed.
Chinese consumption will climb 6.8 percent to an average 8.78 million barrels a day this year, the report showed. The Chinese forecast was unchanged from May.
“Uncertainty about the global economy hasn’t been reflected in our OECD and Chinese economic forecasts,” Lidderdale said. “We’re still looking for significant growth in oil demand.”
Crude oil production by the 12 members of the Organization of Petroleum Exporting Countries declined 20,000 barrels to an average 29.27 million barrels a day in April.
The outlook includes estimates of reductions in production resulting from a U.S. moratorium on deepwater drilling permits that was announced on May 27. Reductions from the moratorium are estimates to average 26,000 barrels a day in the fourth quarter of this year and 70,000 barrels a day in 2011.