Tancred Lidderdale Energy Information Administration 2008 Summer Energy Outlook Conference April 22, 2008 Denver, CO.

Transcription

1 EIA Short-term term Energy Outlook Tancred Lidderdale Energy Information Administration 2008 Summer Energy Outlook Conference April 22, 2008 Denver, CO.

2 Key Factors Driving the Short-Term 1) Rising world oil consumption 2) Low global surplus oil production capacity 3) Insufficient non-opec oil supply growth relative to demand 4) Supply concerns in international oil markets Together these factors contribute to high prices for petroleum products.

3 World Oil Consumption Is Projected to Grow by 1.2 million bbl/d in 2008 Million barrels per day Total Consumption Annual Growth Change from prior year (million barrels per day) China US Other

4 World Oil Spare Production Capacity Projected to Increase; Still Below Historical Norms this Year Million barrels per day Note: Shaded area represents average (2.5 million barrels per day)

5 The Balance Between Global Consumption and non-opec Supply Growth Drives Oil Prices Change from Prior Year (million barrels per day) Non-OPEC Supply (Left Axis) World Consumption (Left Axis) WTI Crude Oil Price (Right Axis) Change from Prior Year (dollars per barrel) Q Q Q Q Q1-15

6 Crude Oil Prices Are Projected to Average $103 per barrel this Summer (April September) Dollars per barrel 100 West Texas Intermediate (WTI) Crude Oil $103 per barrel July $74 per barrel July

7 WTI Spot Price Accuracy 6-month-out Error, $/barrel Mean Average Percent Error EIA 15.2% Consultant A 18.6% Consultant B 16.4% NYMEX 15.2% - Actual Month EIA Consultant A Consultant B NYMEX

8 WTI Spot Price Accuracy 60% 50% Mean Average Percent Error 40% 30% 20% 10% 0% Months Out EIA Consultant B Consultant A NYMEX

9 Major Characteristics of 2008 U.S. Summer Outlook for Gasoline Much higher crude oil prices Decline in gasoline consumption Surge in fuel ethanol production High gasoline inventory levels Lower imports and production from crude oil Weaker refining margins for gasoline

10 Sustained Higher Gasoline Prices Begin to Show Up In Lower Gasoline Consumption Percent change from prior Summer 30% 20% 19.7% 20.5% 10% 0% -10% 3.4% 2.9% 3.4% 1.0% 0.5% 3.1% Decline in Motor Gasoline Consumption % Real Personal Income Retail Price Regular-Grade Gasoline Motor Gas Consumption

11 Ethanol Production and Capacity Are Expected to Show Significant Growth in 2008 Billion gallons per year Production Capacity (end-of-year)

12 High Gasoline Inventories and Ethanol Production Growth Reduces Refinery Production and Imports Change from prior summer (million barrels per day) Consumption Refinery Production Ethanol Production Stock Draw Net Imports

13 Summer Retail Regular-Grade Gasoline Prices Projected to Average $3.54 per Gallon Dollars per gallon Avg. $ Avg. $ Avg. $ Avg. $ Jul Jul Jul Jul Tax Crude Margin* Monthly Retail Price * Retail price minus crude oil cost minus taxes, per gallon

14 Regular Gasoline Summer Prices Vary by Region Dollars per gallon 4.00 U.S. Average = $ $2.87 $2.97 $2.99 $3.09 $2.81 U.S. Average = $3.54 $3.78 $3.50 $3.50 $3.53 $ () East Coast Midwest Gulf Coast Rocky Mountain West Coast Summer = April through September average

15 Price: Wholesale Gasoline Crude Oil Price Spreads cents per gallon Hurricanes Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: EIA, Short-Term Energy Outlook, March EIA, Short-Term Energy Outlook, April 2008

16 Summer Retail Diesel Prices Projected to Average $3.73 per gallon, up 88 cents from Last Summer Dollars per gallon Avg. $ Avg. $ Avg. $ Avg. $ Jul Jul Jul Jul Tax Crude Margin* Monthly Retail Price * Retail price minus crude oil cost minus taxes, per gallon

17 EIA Projects Higher 2008 Natural Gas Spot Prices Dollars per thousand cubic feet Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Residential Price Henry Hub Price Wellhead Price

18 Growth in U.S. Residential Electricity Prices Is Expected to Pick Up Slightly During 2008 Change from prior year 12% 10% 10.1% 8% 6% 4% 2% 0.9% 4.2% 3.3% 2.6% 5.6% 2.2% 2.7% 0% -2% -4% -2.0% -1.2% -1.6%

19 Summary Oil and Gasoline: Growing world oil demand outside the United States continues to keep crude oil prices high. Crude oil expected to remain near $100 for the rest of 2008; Gasoline prices are expected to average $3.54 per gallon over this summer: Diesel prices expected to average $3.73. Market uncertainties are many and may significantly impact prices and supplies during the rest of Natural Gas. Henry Hub spot price expected to average $8.59 per thousand cubic feet in 2008, $1.42 above the 2007 average. Electricity Prices. Residential electricity prices projected to grow at a slightly faster rate in 2008.