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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (153748)	12/9/2004 12:51:36 PM
From: Michael Watkins	Respond to of 281500

The EIA (Energy Information Administration) today released its first-cut of its annual energy outlook for 2005. eia.doe.gov The Energy Information Administration (EIA), in preparing model forecasts for its Annual Energy Outlook 2005 (AEO2005), evaluated a wide range of current trends and issues that could have major implications for U.S. energy markets over the 20-year forecast period, from 2005 to 2025. Trends in energy supply and demand are linked with such unpredictable factors as the performance of the U.S. economy overall, advances in technologies related to energy production and consumption, annual changes in weather patterns, and future public policy decisions [see endnote 1 on page 8]. Among the most important issues identified as having the potential to affect the complex behavior of the domestic energy economy, oil prices and natural gas supply were considered to be of particular significance in increasing the uncertainty associated with the AEO2005 reference case projections. World crude oil prices—defined by the U.S. average refiner’s acquisition cost of imported crude oil (IRAC)—reached a recent low of $10.29 per barrel (in 2003 dollars) in December 1998. For the next 3 years, crude oil prices ranged between just under $20 and just over $30 per barrel. Since December 2001, however, prices have increased steadily, to about $46 per barrel in October 2004. Strong growth in the demand for oil worldwide, particularly in China and other developing countries, is generally cited as the driving force behind the sharp price increases seen over the past 3 years. Other factors contributing to the upward trend include a tight supply situation that has shown only limited response to higher prices; changing views on the economics of oil production; concerns about economic and political situations in the Middle East, Venezuela, Nigeria, and the former Soviet Union; and recent supply disruptions caused by weather events (Hurricane Ivan). The future path of prices is a key uncertainty facing world oil markets.