Energy sees petroleum slipping, but not natgas
Purchasing Staff -- Purchasing, 6/14/2004 2:00:00 AM
Motorists will pay an average of $1.91/gallon for regular gasoline this summer, 3¢ less than forecast last month, as rising inventories boost prospects for adequate supplies, the Energy Department's Energy Information Administration now says. The price, covering April through September, still is 20% higher than during the same period in 2003.
"We've seen a stream of declines in spot prices and that eventually works down to the pumps," says Dave Costello, an economist with the Energy Department who supervises the monthly EIA report. Retail prices declined in the two weeks ended June 7, and will probably keep falling unless there is a supply disruption, he says. Prices during the third quarter are expected to average $1.82 a gallon, 28% higher than during the same period over the past five years. Note: EIA has revised its forecast for U.S. oil prices in the third quarter to $36.23 a barrel, down 60¢, or 1.6%, from the previous estimate, based on benchmark West Texas Intermediate crude. (Last Friday, the cost of crude oil was $38.65 per barrel.) The Organization of Petroleum Exporting Countries is expected to pump about 28.5 million barrels of oil a day during the third quarter, 3.6% more than was expected last month. OPEC has agreed to raise its output quota of 23.5 million barrel a day by 2 million barrels in July and add 500,000 barrels more in August to reduce prices that may threaten global economic growth. Meanwhile, natural gas prices on the spot market will average $6.24 per million Btu this year, 13% higher than last year, according to the new EIA outlook. The 2004 estimate is 7.8% higher than was estimated last month. "Natural gas prices will stay near $6," Costello says. “Whatever else is going on, electricity demand has been humming along, which will increase demand for natgas."
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