EIA forecasts crude oil, gas demand increases through 2013
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Brazil—where production is expected to increase annually by an average of 170,000 b/d over the next 2 years with increased output from its offshore, presalt oil fields—will be a major production-growth area, as will Kazakhstan, which will begin production in Kashagan field in 2013 and increase production annually by an average of 125,000 b/d, EIA said.
Production will also increase in Colombia, Norway, and China, but notable production declines will occur in Russia, Mexico, Sudan, and the UK, the report said.
Price forecasts
EIA expects the price of West Texas Intermediate oil to average about $100/bbl in 2012, $5/bbl higher than the average price last year. For 2013, EIA expects WTI prices to continue to rise, reaching $106/bbl in the fourth quarter of next year. EIA's forecast assumes that US real gross domestic product grows by 1.8% in 2012 and by 2.5% in 2013.
Many uncertainties could push oil prices higher or lower than projected, EIA warned. Should a significant oil supply disruption occur, OPEC members do not increase production, or projected non-OPEC projects come online more slowly than expected, oil prices could be much higher. And if the pace of global economic growth fails to accelerate in OECD countries or if economic growth slows in non-OECD countries, then reduced demand could lower prices.
EIA expects regular-grade motor gasoline retail prices to average $3.48/gal in 2012, down 4¢/gal from last year, and $3.55/gal in 2013.
Natural gas
Natural gas working inventories continue to set new record highs and ended December 2011 at an estimated 3.5 tcf, about 12% higher than a year earlier. EIA's average 2012 Henry Hub natural gas spot price forecast is $3.53/MMbtu, a decline of almost 50¢/MMbtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $4.14/MMbtu in 2013.
EIA expects US marketed gas production to grow by 1.4 bcfd this year to 67.34 bcfd and by 0.7 bcfd in 2013 as low prices reduce new drilling plans and consumption grows at a measured pace. Total marketed production grew by an estimated 4.5 bcfd, up 7.4%, in 2011, the largest year-over-year volumetric increase in history, driven in large part by increases in shale gas production.
Imports of LNG are expected to decline by 26% in 2012 to 0.69 bcfd, as higher global LNG market prices reduce LNG's competitiveness in the US market.
A small amount of LNG will continue to arrive at US terminals in 2012 and 2013 either to take advantage of temporarily high local prices due to cold snaps and disruptions or to fulfill long-term contract obligations, EIA said.
The STEO forecasts that US gas consumption this year will total 68.23 bcfd, up from last year's 66.92 bcfd and driven by an increase in electric power demand mostly, as well as by greater demand by residential, commercial, and industrial customers. Demand in 2013 is forecast to average 69.14 bcfd.
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