WASHINGTON — While gasoline and electricity prices inch up, natural gas prices are expected to hold steady for the near future, according to the latest U.S. Energy Information Administration (EIA) short-term energy outlook.
To date, energy production, shipments, and prices have not been significantly affected by the oil spill following the April 20 explosion aboard the Deepwater Horizon drilling rig and its subsequent loss in the Gulf of Mexico, EIA adds.
Resilient production and mild weather in March and April have combined to keep near-term natural gas prices low. However, the forecast for sustained low natural-gas prices this summer will likely contribute to a decline in natural gas drilling activity over the next several months, the EIA reports. As a result, the current 2011 forecast of higher prices comes as production begins to decline this year.
The Henry Hub spot price forecast averages $4.48 per MMBtu in 2010 and $5.34 per MMBtu in 2011.
For propane users, total U.S. inventories experienced a modest build of 0.6 million barrels last week to end at 39.5 million barrels in total. (Data for residential and wholesale prices for heating oil and propane are only collected during the heating season, which begins in October.)
Retail sales of electricity to the industrial sector during the first quarter of 2010 are estimated to have grown by 2.7% since the same period last year, which would be the first year-over-year gain in industrial electricity sales since the beginning of 2008. Total consumption of electricity across all sectors is projected to grow by 2.7% during 2010 and by 1.3% next year.
The EIA projects residential prices to grow by 0.3% this year and 2.8% in 2011.
If you have a long drive to your laundry or plan on taking a driving vacation this summer, expect regular-grade motor gasoline retail prices to average $2.94 per gallon during the summer driving season (April 1-Sept. 30), up from $2.44 per gallon last summer.
Overall, EIA expects gasoline prices will average $2.86 per gallon in 2010 and $2.98 in 2011.