WASHINGTON — Because the current global economic slowdown is now projected to be more severe and longer than in last month’s Energy Information Administration (EIA) short-term energy outlook, this month’s outlook projects further reductions of global energy demand and additional declines in energy prices.
World real gross domestic product (GDP) growth is projected to slow from about 4% in 2006 and 2007 to about 2.7% this year and 0.5% in 2009. Last month’s EIA outlook assumed world GDP would increase by 1.8% in 2009.
Residential natural gas prices during this current heating season (October though March) are projected to average $12.56 per thousand cubic feet (Mcf), a decrease of 1.3% from the 2007-2008 heating season. Residential heating oil prices are projected to average $2.53 per gallon, a reduction of 24% from last winter, and residential propane prices are projected to average $2.10, a decrease of 14%.
The U.S. economic recession is also contributing to lower natural gas wellhead prices, with the Henry Hub natural gas spot price projected to decline from an average of $9.17 per Mcf in 2008 to $6.25 per Mcf in 2009.