In its short-term energy outlook, the Energy Information Administration (EIA) projects that the West Texas Intermediate (WTI) spot price will average $77/barrel in the fourth quarter of 2010 and $82/barrel in 2011. WTI is expected to rise to $84/barrel by the end of next year.
As a result, EIA expects that regular-grade motor gasoline retail prices, which averaged $2.35/gal. last year, will average $2.69 in the second half of 2010, down 7¢/gal. from the average for the first half of the year. In 2011, the slightly higher projected crude oil prices combined with strengthening refiner margins are expected to boost annual average motor gasoline prices to $2.90/gal.
Despite a slight reduction in forecast global demand growth and the drop in world oil prices in recent weeks, a projected gradual reduction in global oil inventories should lend support to firming oil prices, EIA says.
EIA estimates world oil consumption growth of 1.6 million barrels per day (bbl/d) in 2010 and 1.4 million bbl/d in 2011. Countries outside of the Organization for Economic Cooperation and Development (OECD), especially China, the Middle East countries, and Brazil, represent most of the expected growth in world oil consumption
EIA expects OPEC crude oil production to rise slightly (0.3 million bbl/day in 2010 and 0.5 million bbl/day in 2011) to accommodate increasing world oil demand and to maintain OPEC market objectives. OPEC’s surplus capacity should remain near 5 million bbl/d compared with 4.3 million in 2009 and 1.5 million in 2008.