The US Energy Information Administration (EIA) has released its first Short-Term Energy Outlook for 2013. It also includes data for 2014 for the first time.
Brent crude oil spot price to fall in 2013
The EIA expects that the Brent crude oil spot price, which averaged US$ 112/bbl in 2012, will fall to an average of US$ 105/bbl in 2013 and US$ 99/bbl in 2014. The projected discount of West Texas Intermediate (WTI) crude oil to Brent, which averaged US$ 18/bbl in 2012, will fall to an average of US$ 16/bbl in 2013 and US$ 8/bbl in 2014, as planned new pipeline capacity lowers the cost of moving mid-continent crude oil to the Gulf Coast refining centres.
The EIA estimates US total crude oil production averaged 6.4 million bbl/d in 2012, an increase of 0.8 million bbl/d from the previous year. Projected domestic crude oil production continues to increase to 7.3 million bbl/d in 2013 and 7.9 million bbl/d in 2014, which would mark the highest annual average level of production since 1988.
Henry Hub natural gas spot price will also fall
Natural gas working inventories, which a record-high level in early November, ended 2012 at an estimated 3.5 trillion cubic feet (tcf), slightly above the level at the same time the previous year. The EIA expects the Henry Hub natural gas spot price, which averaged US$ 4.00/million Btu in 2011 and US $2.75/million Btu in 2012, will average US$ 3.74/million Btu in 2013 and US$ 3.90/million Btu in 2014.
Coal share of total electricity generation to rise
The EIA expects the coal share of total electricity generation to rise from 37.6% in 2012 to 39% in 2013 and 39.6%in 2014, as natural gas prices rise relative to coal prices. However, lower-than-projected natural gas prices along with the industry's response to future environmental regulations could cause the coal share of total generation to fall below this forecast.
Adapted from press release by Jonathan Rowland.
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