The Energy Department increased its crude oil price forecast for 2011 on projections of greater global fuel consumption.
West Texas Intermediate oil, the U.S. benchmark, will average $85.17 a barrel next year, up from last month’s forecast of $83, according to the department’s monthly Short-Term Energy Outlook, released today. Prices in 2010 will average $78.80, 83 cents higher than October’s estimate of $77.97.
The department raised its outlook for global oil consumption next year to 87.77 million barrels a day from 87.44 million last month. Global gross domestic product will grow 3.3 percent in 2011, unchanged from the projection a month ago, according to the report.
“The increase in our price forecast was based on a reevaluation of the relationship between oil consumption growth and economic growth,” said Tancred Lidderdale, an economist with the department’s Energy Information Administration in Washington, who helped write the report.
U.S. gross domestic product will grow 2.2 percent in 2011, up from projections of 2.1 percent a month ago, according to the report. The economy of the world’s biggest-oil consuming country will climb 2.6 percent in 2010, which is unchanged from last month’s estimate.
Demand for crude oil will climb 2.4 percent to 86.33 million this year, according to the report. The 2010 forecast was increased by 270,000 barrels from last month’s projection.
U.S. oil consumption will average 19.16 million barrels a day next year, up 80,000 barrels from last month’s forecast. This year’s projection was bolstered by 70,000 barrels from the October report.
Regular gasoline at the pump, averaged nationwide, will cost $2.97 a gallon in 2011, up 1.7 percent from $2.92 estimated in the October report. The fuel will average $2.77 a gallon this year, up 18 percent from $2.35 in 2009.
U.S. heating oil users will spend an average $2,146 this winter, up 1 percent from $2,124 forecast last month and 13 percent higher than the average $1,906 spent by households last winter. The cost per gallon will average $3.13 this heating season, up 7 cents from last month’s estimate.