U.S. Cuts 2010 Forecast for Oil Prices, Raises Estimate for Global Demand
The U.S. Energy Department left its crude oil price forecast for 2010 little changed after prices in New York posted their smallest monthly move this year.
West Texas Intermediate oil, the U.S. benchmark, will average $78.69 a barrel this year, down from last month’s forecast of $78.75, according to the department’s 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 unchanged from June’s report.
“There are no big changes in the outlook,” said Tancred Lidderdale, a government economist in Washington who supervised the monthly outlook. “All of the news that’s rocked the market over the last month has left prices near where we started.”
Crude oil traded on the New York Mercantile Exchange rose 2.2 percent in June to $75.63 a barrel. It was the smallest monthly move since November. Futures for August delivery rose $1.74, or 2.4 percent, to $73.72 at 1:34 p.m.
Regular gasoline, averaged nationwide, will cost $2.80 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 15 percent higher than last summer’s average of $2.44 a gallon. The pump price is up 1 cent from last month’s forecast.
The department raised its outlook for global oil consumption this year to 85.82 million barrels a day from 85.51 million last month. That’s up 1.9 percent from last year’s 84.26 million. The 2009 demand figure was revised from 84.01 barrels a day. Oil use will climb to 87.29 million in 2011, 170,000 barrels a day higher than last month’s projection.
U.S. oil use will average 18.89 barrels a day this year, up 200,000 barrels from 2009. This year’s forecast was decreased 30,000 barrels from the June 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 decline 20,000 barrels to 45.35 million in 2011. Next year’s estimate was down 20,000 barrels from June.
The OECD doesn’t include developing countries such as China, India and Brazil. Consumption by non-OECD countries will rise 1.52 million barrels to 40.44 million barrels a day this year. The forecast is up 290,000 barrels from last month. Demand in emerging economies will climb 1.5 million barrels to 41.94 million in 2011, the report showed.
“All of the growth is outside the OECD,” Lidderdale said.
Chinese consumption will climb 6.9 percent to an average 8.89 million barrels a day this year, the report showed. The Chinese forecast was raised 110,000 barrels from June.
The outlook includes estimates of reductions in production resulting from a U.S. moratorium on deepwater drilling permits that was announced on May 27 after a drilling rig leased by BP Plc exploded on April 20.
Decreases are estimated to average 31,000 barrels a day in the fourth quarter of this year, up from 26,000 last month. Output will be reduced about 82,000 barrels a day in 2011, up from 70,000 in June.
“These are just a technical revision,” Lidderdale said. “We are still uncertain about whether rigs will leave the region and what the moratorium will mean for projects that are already under way.”