In the report released Tuesday, the EIA noted that the monthly average price of West Texas Intermediate (WTI) crude oil has fallen by more than half between July and November, reflecting the fallout from the rapid decline in world petroleum demand. The annual average WTI price is now projected to be $100 per barrel in 2008 and $51 in 2009.
The average U.S. prices for regular-grade gasoline and diesel fuel, at $1.70 and $2.52 per gallon respectively on Dec. 8, were both more than $2 per gallon below their highs in mid-July. With the assumption of a fragile economy throughout 2009, along with lower projected crude oil prices, annual average retail gasoline and diesel fuel prices in 2009 are projected to be $2.03 and $2.47 per gallon, respectively.
Just a month ago, EIA predicted crude would average between $60 and $65 a barrel for 2009 and diesel would be $2.73 per gallon.
EIA officials expect global oil consumption to fall by 450,000 barrels a day next year. (Total world oil consumption is between 85 million and 86 million barrels a day.) If these projections hold true, it will mark the first time in three decades that world crude consumption declined year-over-year.
On the supply side, however, EIA projects that total non-OPEC supply will grow by 410,000 barrels per day in 2009, with the largest sources of growth coming from Azerbaijan, Brazil and the United States. OPEC crude production is expected to average 30.6 million barrels per day in 2009, about 1.6 million below 2008 levels. OPEC is scheduled to meet on Dec. 17 to evaluate the effectiveness of its earlier decisions to cut production targets by 1.5 million barrels per day and to weigh the need for additional production cuts.
(Read complete report at www.eia.doe.gov/emeu/steo/pub/contents.html)