U.S. Department of Energy
Energy Information Administration
Short-Term Energy Outlook
May 12, 2009 Release
To see details of this forecast update, go to the following World Wide Web site on the Internet:
http://www.eia.doe.gov/emeu/steo/pub/contents.html
Highlights
Energy prices rose in early May following reports suggesting that the U.S. economy may have reached a turning point in the current recession, at least in some sectors. Near-term prices in this Outlook, however, remain somewhat below market prices as of its release date given that prospects for a global economic turnaround remain highly uncertain. EIA’s forecast is based on a macroeconomic outlook that assumes the U.S. and global economies begin to stabilize in the coming months and show signs of recovery late in 2009 and into 2010.
The price of West Texas Intermediate (WTI) crude oil is expected to remain relatively flat for the remainder of 2009, averaging about $55 per barrel over the second half of 2009. Assuming a modest economic improvement next year, WTI prices are expected to average about $58 in 2010.
During this summer driving season (April through September), regular gasoline retail prices are projected to average $2.21 per gallon, down about $1.60 from last summer. The annual average regular-grade gasoline retail price in 2009 is expected to be $2.12 per gallon, increasing to an average of $2.30 in 2010. The annual average diesel fuel retail prices are expected to be $2.26 and $2.48 per gallon, respectively, in 2009 and 2010.
The Henry Hub natural gas spot price is projected to average $4.06 per thousand cubic feet (Mcf) in 2009, down from an average of $9.13 per Mcf in 2008. Then, buoyed by modest economic growth next year, the price is expected to increase to an average of about $5.21 per Mcf in 2010. The projected steep decline in industrial output this year is expected to reduce industrial natural gas consumption by 8 percent, resulting in a 1.9-percent decrease in total annual consumption of natural gas. Natural gas consumption in the electric power sector, however, is projected to increase by 2.1 percent since lower natural gas prices are expected to back out some coal consumption in this sector. (See this month’s supplemental report, The Implications of Lower Natural Gas Prices in the Electric Power Sector).
