NEW YORK (Dow Jones Newswires), December 9, 2008
U.S. government forecasters said Tuesday that crude oil next year will be at its cheapest levels since 2004 as worldwide petroleum demand shrinks two years in a row.
The Energy Information Administration said benchmark West Texas Intermediate crude will average $51.17 next year, about half this year's expected average price of $100.40 a barrel. U.S. oil prices were last lower on a full-year basis in 2004, when they averaged $41.44 a barrel.
The EIA's updated forecast was included in its monthly Short-Term Energy Outlook, released Tuesday.
"The current global economic slowdown is now projected to be more severe and longer than in last month's Outlook, leading to further reductions of global energy demand and additional declines in crude oil and other energy prices," the EIA's outlook said. The agency is the independent statistics and analytical wing of the U.S. Department of Energy.
The EIA foresees global oil demand declining in 2008 and 2009, marking the first two-year straight decline in three decades. Crude's steep plunge from highs above $145 a barrel earlier this year reflects "fallout from the rapid decline in world petroleum demand," the agency said.
Its 2009 crude price forecast was $12.33 a barrel, or 19%, lower than last month's previous price forecast of $63.50 a barrel.
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