Short-Term Energy Outlook (U.S. Energy Information Administration)

• This edition of the Short-Term Energy Outlook is the first to include forecasts (monthly, quarterly and annual) through December 2012. 

• EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $93 per barrel in 2011, $14 higher than the average price last year.  For 2012, EIA expects WTI prices to continue to rise, with a forecast average price of $99 per barrel in the fourth quarter 2012.  EIA's forecast assumes U.S. real gross domestic product (GDP) grows 2.2 percent in 2011 and 2.9 percent in 2012, while world real GDP (weighted by oil consumption) grows by 3.3 percent and 3.7 percent in 2011 and 2012, respectively.

• EIA expects regular-grade motor gasoline retail prices to average $3.17 per gallon this year, 39 cents per gallon higher than last year and $3.29 per gallon in 2012, with prices forecast to average about 5 cents per gallon higher in each year during the April through September peak driving season.  There is regional variation in the forecast, with average expected prices on the West Coast about 25 cents per gallon above the national average during the April through September period.  There is also significant uncertainty surrounding the forecast, with the current market prices of futures and options contracts for gasoline suggesting more than a 25 percent probability that the national average retail price for regular gasoline could exceed $3.50 per gallon in the June through September period in 2011 and an 8 to 10 percent probability that it could exceed $4.00 per gallon in August and September 2011.

Crude Oil and Liquid Fuels Overview.  EIA expects a continued tightening of world oil markets over the next 2 years.  World oil consumption grows by an annual average of 1.5 million barrels per day (bbl/d) through 2012 while the growth in supply from non-Organization of the Petroleum Exporting Countries (non-OPEC) countries averages less than 0.1 million bbl/d each year.  Consequently, EIA expects the market will rely on both inventories and significant increases in production of crude oil and non-crude liquids in OPEC member countries to meet world demand growth.  While on-shore commercial oil inventories in the Organization for Economic Cooperation and Development (OECD) countries remained high last year, floating oil storage fell sharply in 2010, and EIA expects OECD oil inventories will decline over the forecast period.

Crude Oil Prices.  WTI crude oil spot prices averaged over $89 per barrel in December, about $5 per barrel higher than the November average, as expectations of higher oil demand, combined with unusually cold weather in both Europe and the U.S. Northeast, lifted prices.  EIA has raised the first-quarter 2011 WTI spot price forecast by over $7 per barrel from the last month's Outlook, to about $92 per barrel.  WTI spot prices rise to an average $99 per barrel in the fourth quarter of 2012.  Projected WTI spot prices average $93 per barrel in 2011 and $98 per barrel in 2012.