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Energy Prices Continue to Fall

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Natural gas prices.
Photo: ©iStockphoto.com/RCgrafix

Staff Writer |

WASHINGTON — The Henry Hub spot price averaged $4.05 per MMBtu in August, 37 cents lower than the July average, according to the U.S. Energy Information Administration’s (EIA) latest Short-Term Energy Outlook report. This month’s report lowers the 2011 forecast by 4 cents to $4.20 per MMBtu and lowers the 2012 forecast by 11 cents to $4.30 per MMBtu, the report says.

Part of this downturn is due to natural gas consumption for electric power generation falling from 29.7 billion cubic feet per day (Bcf/d) in July to 29.2 Bcf/d in August, as July’s extreme temperatures eased, EIA says. Still, the administration expects that total natural gas consumption will grow by 1.8% to 67.3 Bcf/d in 2011.

The outlook is better for route drivers as well, with regular-grade gasoline retail prices falling by 40 cents per gallon from their peak this year of $3.97 per gallon on May 9 to $3.57 per gallon on June 27, EIA says. Gasoline retail prices stabilized in July and August with weekly retail prices averaging between $3.58 per gallon and $3.71 per gallon, but are projected to fall to an average $3.47 per gallon in the fourth quarter 2011 after refiners switch production from summer-grade gasoline to lower-cost winter-grade gasoline.

EIA expects U.S. refiner average crude oil acquisition cost will average $100 per barrel in 2011 and $103 per barrel in 2012. But energy price forecasts are highly uncertain, the report says.

Comments

energy price will surge

With India and China fast expanding their economies these drops in energy prices will be very temporary. All the cheap crude oil has already been sucked out of the ground and it is not hard to see what happens to price when demand is increasing at a rapid pace and supply is more and more constricted.
In my opinion oil should get to $170-200 by the end of 2012. Not only that, but you also have the "Too Big to Fail" banks engaged in crude oil price manipulation and speculation and that is driving price up as well. Do not even get me started on the dollar. That is having an impact as well.

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