|Forecast increase in petroleum consumption. Click to enlarge. Source: EIA.|
In the current release of its Short Term Energy Outlook (STEO), the US Energy Information Administration projects an increase in US demand for oil of 1.7% in 2007 (350,000 barrels per day), to 20.96 million barrels per day.
That reflects a decrease from the prior STEO, in which the EIA forecast an increase in US oil consumption of 2.0% in 2007. The newest figures reflect a 1.13% increase in gasoline consumption to 9.33 million barrels per day due to a corresponding increase in total vehicle miles traveled.
The EIA expects petroleum demand in the US to end up flat for this year. For the first 6 months of 2006, average demand was down 130,000 bpd (0.6%) from the previous year due to mild weather—reducing demand for heating fuel—and rapidly rising motor gasoline and jet fuel prices. The second half of 2006, however, should see slightly growth in total petroleum demand of 30,000 bbl/d over the same period in 2005.
Surplus world crude oil production capacity, all of which is located in Saudi Arabia, is expected to increase only slightly in 2007 (World Oil Surplus Production Capacity). As a result, surplus world oil production capacity is projected to remain near 30-year lows.—EIA STEO
The EIA projects that due to the limited surplus world crude oil production capacity and continued tight supply-demand balance, world oil prices in 2007, on average, will be only slightly less than their average 2006 levels. The WTI crude oil price averaged $63.80 per barrel in September.
EIA anticipates an increase in WTI prices to about $67 by January, boosted by winter heating fuel demand. Under the baseline weather scenario, the projected fourth-quarter average WTI price of about $63 per barrel is $3 per barrel above the year-ago level, but $9 per barrel lower than in the previous STEO.
Average retail regular gasoline prices experienced the second largest average monthly decline ever, falling by 40 cents per gallon from August to September. Only the record 46-cents-per-gallon drop coming off the hurricane season price spike in November 2005 was greater. The average pump price for the fourth quarter of 2006 is now expected to be $2.29 per gallon, down 54 cents per gallon from the third quarter. Regular gasoline prices are projected to average $2.58 in 2006 and $2.51 in 2007.—EIA STEO
Short Term Energy Outlook Chart Gallery October 2006