WASHINGTON – The price of crude oil is expected to rise 9.2 percent next year to a 2009 average of $126 per barrel, according to the latest forecast from U.S. Department of Energy analysts.
In its monthly Short-Term Energy Outlook, released today, the DOE’s Energy Information Administration (EIA) said its forecasters anticipate the global demand for petroleum will be stronger next year that it is today.
The monthly average price of West Texas Intermediate crude oil – a standard benchmark for oil prices – fell from more than $133 per barrel in June and July to about $117 per barrel in August, the EIA noted. (Today, it stands at $103.)
The EIA now predicts the average price for crude oil this year will be $116 per barrel – a 61-percent increase from last year, when crude averaged $72 per barrel. Next year, the agency is forecasting the average price will rise another 8.6 percent from the anticipated 2008 average.
The energy markets’ extreme volatility over the past 12 months was largely unexpected. A year ago, the EIA noted, its analysts were predicting the average price of crude oil in 2008 would be $71 per barrel.
The wholesale price of natural gas – measured by the benchmark Henry Hub spot price – is expected to fall to $8.55 per thousand cubic feet (mcf) in 2009, the agency said. This year, it predicts the price will average $9.70 per mcf, up from the average price of $7.17 for all of 2007.
But the nation’s total natural gas consumption will rise 2.7 percent for all of 2008, despite this year’s higher prices, and 2.2 percent in 2009, the forecast said.
In the heating season ahead, home heating oil is expected to sell for an average retail price of $4.13 per gallon a 25-percent increase from the previous October through March period, the EIA said. Residential natural gas prices during the same period are predicted to average $14.93 pre mcf, a 17-percent increase from the 2007-2008 heating season.
Compared with last winter, the average household heating bill is expected to rise 30 percent, or $585, for homes that heat with oil; 19 percent, or $162, for homes that heat with natural gas; and 13 percent, or $217, for propane-heated homes.
Meanwhile, gasoline prices at the pump are expected to average $3.88 per gallon in 2009, up from this year’s predicted $2.61 per gallon average, the agency said. It remarked on the dramatic decline in retail gasoline prices, which has pared the cost of gasoline to a weekly U.S. average of $3.65 on Sept. 8 from $4.11 on July 14, a 46-cent decline in less than two months.
Diesel fuel also is expected to be pricier next year. The EIA predicted it will retail for average of $4.26 per gallon next year, up from the current prediction of 4.09 per gallon for all of 2008.
The U.S. Energy Information Administration (EIA) is a division of the federal Department of Energy. Additional information, including the EIA’s latest monthly Short-Term Energy Outlook, is available at www.eia.doe.gov.