The U.S. Energy Department reduced its crude oil price forecast for 2011 on lower demand growth in developed countries and ample stockpiles in the central U.S.
West Texas Intermediate oil will average $98.43 a barrel this year, down 3.4 percent from June’s projection of $101.91, the department said today in its monthly Short-Term Energy Outlook. The average cost of domestic and imported crudes used by U.S. refiners will be $102.38 a barrel in 2011, down 1.1 percent from last month’s projection of $103.54.
WTI dropped relative to other oil grades this year because of ample stockpiles at Cushing, Oklahoma, the delivery point for the crude. There are no pipelines linking the storage hub to the Gulf of Mexico Coast. TransCanada Corp.’s Keystone XL pipeline is scheduled to connect Cushing with the coast starting in 2013.
“We’re seeing WTI decline relative to crudes,” said Tancred Lidderdale, an economist with the department’s Energy Information Administration in Washington, who helped write the report. “This should remain the case until at least 2013, when a new pipeline to the Gulf may open.”
Crude prices in 2012 will average $102.50, a decrease from last month’s estimate of $107.
The department cut its forecast for global oil consumption for this year to 88.16 million barrels a day from 88.43 million estimated last month, the report showed. Demand will be 1.6 percent higher than last year’s average of 86.73 million and will climb to 89.74 million in 2012.
U.S. oil consumption will average 19.18 million barrels a day in 2011, down from last month’s forecast of 19.3 million. Next year demand is projected to climb to 19.32 million.
Demand from the 30 members of the Organization for Economic Cooperation and Development will average 42.24 million barrels a day this year. The forecast was cut by 190,000 barrels from last month. OECD consumption will increase 40,000 barrels a day to 45.96 million next year, according to the report.
The OECD doesn’t include developing countries such as China, India and Brazil. Consumption by non-OECD countries will increase 1.54 million barrels to 42.24 million barrels a day this year. The forecast is down 80,000 barrels from last month. Demand will rise 1.54 million barrels to 43.78 million in 2012, the report showed.
“China, the Middle East and other emerging markets are definitely driving demand growth,” Lidderdale said. “The U.S. consumption outlook was revised substantially lower.”
Regular gasoline, averaged nationwide, will cost $3.71 a gallon from April through September, according to the report. The forecast is down 1.1 percent from June’s projection of $3.75. Pump prices will be up 34 percent from $2.76 a gallon last summer.
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