The Energy Information Administration’s (EIA) latest energy outlook essentially maintains their rather bullish view on oil and natural gas.
After the 2008 – 2009 decline, oil consumption is expected to grow 1.1 million barrels/day in 2010. This will be primarily driven by developing countries such as China, rather than developed nations such as Europe, Japan, or the US.
As shown below, we’re still at least two years away from retaking 2007’s peak level of world oil consumption. It might require developed countries to became substantial sources of demand growth by 2011.
Nevertheless, the EIA expects a lift to oil prices for 2010 as growth in demand outpaces that of non-OPEC production. This of course assumes that the global economy recovers as expected.
American consumers will get a sigh of relief on the US natural gas front.
Inventories are expected to hit a record high by the end of October and help heating costs stay low. While gas futures imply rising prices ahead, the EIA has a moderately less bullish view, shown below.
EIA: EIA projects average household expenditures for space-heating fuels to be $960 this winter (October 1 to March 31), a decrease of $84, or 8 per cent, from last winter. This forecast principally reflects lower fuel prices, although expected slightly milder weather than last winter will also contribute to lower fuel use in many areas. The largest expenditure decreases are in households using natural gas and propane, projected at 12 and 14 per cent, respectively.
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