US raises winter oil forecast to near $70
FT.com / International Economy / Oil - US raises winter oil forecast to near $70
By Javier Blas in London
Published: September 7 2005 19:11 | Last updated: September 8 2005 00:03
The US government on Wednesday raised its crude oil price forecasts for this winter to near $70 a barrel, and above $60 a barrel for 2006, and said US energy expenditures for 2005 would reach their highest level in 18 years.
The US Energy Department said that the jump in oil, natural gas, petrol and heating oil prices would increase this year’s national energy expenditures to 8.3 per cent of gross domestic product, up from 6.2 per cent in 2002.
“Dramatic increases in domestic energy costs, assisted by everything from tight world oil markets, to blistering summer heat, to the ravages of Hurricane Katrina, have made for an exasperating summer for many consumers and have set the stage for a potentially expensive winter heating season,” the department said in its monthly markets report.
Before the hurricane, the Energy Information Administration – the department’s statistics office – had forecast oil prices averaging $56.70 a barrel in 2006.
EIA forecasts now show oil prices averaging $63.50 a barrel next year.
The report said that oil supply from the Gulf of Mexico was not expected to recover until November or December, but that lower energy demands would surface, as high oil and natural gas prices begin to slow economic growth.
“Hurricane Katrina caused significant direct damage to offshore rigs, refineries, pipelines, and ports in the Gulf of Mexico, with widescale electricity outages and flooding exacerbating the already devastated infrastructure, compounded by the evacuation of thousands of employees,” the EIA warned.
Oil and petrol prices rose yesterday as the International Energy Agency, the industrial countries’ oil monitor, revealed that petrol would make up less than 20 per cent of the emergency stockpile 2m barrels a day release approved last week.
The bulk of the stock draw will be crude oil, with middle distillates such as heating oil, diesel and fuel oil also accounting for a large share.
US oil futures lost ground on Wednesday owing to prospects of lower oil demand as high energy prices slow the US economy.
On Nymex, West Texas Intermediate crude contracts for October delivery lost $1.59 in late trading, ending the day at $64.37 a barrel.
■ Norman Mineta, US transportation secretary, said on Wednesday that US regulators were considering a suspension of the 7.5 per cent ticket tax paid by airline passengers, a move that would help carriers more easily raise fares and recoup some losses blamed on soaring fuel prices, Reuters reports from Washington.
By Javier Blas in London
Published: September 7 2005 19:11 | Last updated: September 8 2005 00:03
The US government on Wednesday raised its crude oil price forecasts for this winter to near $70 a barrel, and above $60 a barrel for 2006, and said US energy expenditures for 2005 would reach their highest level in 18 years.
The US Energy Department said that the jump in oil, natural gas, petrol and heating oil prices would increase this year’s national energy expenditures to 8.3 per cent of gross domestic product, up from 6.2 per cent in 2002.
“Dramatic increases in domestic energy costs, assisted by everything from tight world oil markets, to blistering summer heat, to the ravages of Hurricane Katrina, have made for an exasperating summer for many consumers and have set the stage for a potentially expensive winter heating season,” the department said in its monthly markets report.
Before the hurricane, the Energy Information Administration – the department’s statistics office – had forecast oil prices averaging $56.70 a barrel in 2006.
EIA forecasts now show oil prices averaging $63.50 a barrel next year.
The report said that oil supply from the Gulf of Mexico was not expected to recover until November or December, but that lower energy demands would surface, as high oil and natural gas prices begin to slow economic growth.
“Hurricane Katrina caused significant direct damage to offshore rigs, refineries, pipelines, and ports in the Gulf of Mexico, with widescale electricity outages and flooding exacerbating the already devastated infrastructure, compounded by the evacuation of thousands of employees,” the EIA warned.
Oil and petrol prices rose yesterday as the International Energy Agency, the industrial countries’ oil monitor, revealed that petrol would make up less than 20 per cent of the emergency stockpile 2m barrels a day release approved last week.
The bulk of the stock draw will be crude oil, with middle distillates such as heating oil, diesel and fuel oil also accounting for a large share.
US oil futures lost ground on Wednesday owing to prospects of lower oil demand as high energy prices slow the US economy.
On Nymex, West Texas Intermediate crude contracts for October delivery lost $1.59 in late trading, ending the day at $64.37 a barrel.
■ Norman Mineta, US transportation secretary, said on Wednesday that US regulators were considering a suspension of the 7.5 per cent ticket tax paid by airline passengers, a move that would help carriers more easily raise fares and recoup some losses blamed on soaring fuel prices, Reuters reports from Washington.
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