Well, at least the DOE agrees with you -
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Energy prices to stabilize or fall
DOE sees supplies holding up well
By Rex Nutting, CBS.MarketWatch.com
Last Update: 3:10 PM ET Sept. 6, 2001
WASHINGTON (CBS.MW) -- Energy prices are likely to stabilize or fall modestly in the next few months, according to the U.S. Energy Department's latest short-term outlook released Thursday.
Supplies of most energy products are adequate to prevent large spikes in prices, the government agency said. Read the report eia.doe.gov
Next year, demand is expected to grow slightly faster than the government believed a month ago.
After seeing the impact of lower energy prices on business costs and reading the incipient signs of a recovery, the Energy Department now thinks industrial output will rise 3.5 percent in 2002, up from the 2.1 percent forecast in August.
The biggest surprise to the government's energy forecasters was the quick buildup of natural gas supplies since March. With the economy remaining soft, "production capability is more than sufficient to balance the U.S. natural gas market without any significant price spikes over at least the next 15 months," the government said.
Natural gas prices should average under $3 per thousand cubic feet this winter and "well under that" in 2002, the report said.
"It is now quite possible that prices may collapse even further if the fall and winter weather patterns turn out to be mild, crude oil prices stay stable, and the economy fails to muster at least a modest resurgence over the next few quarters," the government said.
Stability in the natural gas market is a crucial element in other markets as well. Sufficient supplies of natural gas should take pressure off heating oil markets this winter and should allow electric utilities to maintain prices. Coal prices are expected to rise slightly over the next year while natural gas prices fall.
The report also had good news for U.S. drivers. Although gasoline prices spiked higher in August after a refinery fire in the Midwest, the government anticipates a modest drop in average gasoline prices from about $1.55 now to $1.52 in September.
"Supply increases from other areas are expected to make the worst of the current upswing short-lived," the government said. "We expect prices to start easing by the fourth quarter."
The supply crunch could lead to tighter heating oil and diesel supplies in the winter, however.
Although the government now anticipates demand in the United States for petroleum will grow 2.1 percent in 2002 to 20.3 million barrels a day, it left its forecast unchanged that world petroleum demand would grow by 1 million barrels a day. |
