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U.S. ENERGY INFORMATION ADMINISTRATION WASHINGTON DC 20585 FOR IMMEDIATE RELEASE JANUARY 3, 1997 EIA Short-Term Outlook Projects Downtrend in Crude Oil Prices; In its new Short-Term Energy Outlook, released today, the Energy Information Administration (EIA) projects that crude oil prices will settle down from current high levels to average between $21 and $21.50 per barrel in 1997 and 1998. An average decline of about $1 per barrel is seen between the fourth quarter of 1996 and the first quarter of 1997, particularly since Iraqi crude oil is now flowing into the world market. A decline is less likely if winter turns abnormally cold in the weeks ahead. Despite the expected short-term decline in prices, these projections represent an upward revision in average price forecasts from EIA's previous reports. Strong world oil demand and relatively low inventories have kept persistent pressure on spot prices in recent months. Residential heating oil prices for the fourth quarter of 1996 averaged $1.05 per gallon, 16 cents per gallon above the fourth quarter of 1995. Much of this increase reflects the increase in crude oil prices (14 cents per gallon) over the same period. Assuming normal weather over the next few months, residential heating oil prices in the first quarter of 1997 are expected to be about $1.06 per gallon, 10 cents per gallon higher than the same period in 1996, with about 80 percent of that increase being related to crude oil price increases. Severe weather could result in more increases. For example, retail prices would be expected to be up to 6 cents per gallon higher than in the Outlook's base case if weather is 10 percent colder than normal. U.S. stocks of distillate fuels (primarily heating oil and diesel fuel) have been well below year-ago levels so far this heating season, although recent, relatively mild, weather in the Northeast has tended to alleviate the situation somewhat. European stocks have also been low, contributing to generally tight Atlantic Basin supplies. Maintaining or improving the relative stock situation during the rest of the winter in the United States will probably require higher imports and/or more distillate production than seen last year. On the domestic production side, U.S. refiners have proven that they are capable of producing distillate at high rates, based on an estimated year-over-year increase for the fourth quarter of 1996 of nearly 10 percent. Other highlights from the EIA quarterly Short-Term Energy Outlook include:
The Short-Term Energy Outlook provides quarterly short-term energy supply, demand, and price projections for publication in January, April, July and October. To meet the public's demand for more timely availability of energy data and forecasts, the Short Term-Energy Outlook is now being released on Internet more than a week earlier than its actual publication. The Outlook is available on Internet as of January 3; the published version is expected to be available about 10 days later. Internet access to the Short-Term Energy Outlook can be obtained through the EIA Home Page on the World Wide Web system. The Internet address is: http://www.eia.doe.gov/emeu/steo/pub/level1.html Copies of the Short-Term Energy Outlook, First Quarter 1997 are available from the U.S. Government Printing Office, 202/512-1800, or through EIA's National Energy Information Center (NEIC), 202/586-8800.
EIA Press Contact: Thomas Welch, 202/586-1178 DOE News Media Contact: Joanna Stancil, 202/586-5806
EIA-97-02 Contact:
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