# Presentation: 922922

## Outlook for Natural Gas & Petroleum

**Guy Caruso**
**Administrator**
**Energy Information Administration**
**IOGCC Conference**
**Williamsburg, Virginia**
**May 19, 2003**
**(Corrected August 2003)**

**www.eia.doe.gov**

## Presentation Coverage

**Petroleum:     World Oil Market**
**                             ****U.S. Petroleum Stocks**
**                             ****Short-Term Outlook **
**                             ****Long-Term Outlook**
**Natural Gas: Current Supply **
**                            ****Short-Term Outlook **
**                             ****Long-Term Outlook**

## WTI Crude Oil PriceExpected to Drop

**WTI Crude Oil Price****Expected to Drop**

**Source: Reuters Spot Prices, EIA Short-Term Energy Outlook, May 2003**

**Proj.**

**History**

## Annual World Oil Demand Growth

**Sources: EIA; Short-Term Energy Outlook, May 2003**

**History**

## OPEC Production Highly Uncertain in 2003

**History**

**Sources: EIA;  Short-Term Energy Outlook, May 2003**

**Million Barrels per Day**

## Demand Growth Expected in 2003 and 2004 for Most Petroleum Products (Change from Year Ago)

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, May 2003.**

** ****0.2%**

**2.4%**

**2.4%**

**0.2%**

**2.4%**

**2.4%**

## U.S. Crude Inventory Expected to Remain Close to Minimum Operating Levels Through 2003

**Sources: EIA, Short-Term Energy Outlook, May 2003**

**History**

**Million Barrels**

## Distillate Stocks Could Begin Next Winter on the Low Side

**Distillate Stocks Could Begin Next Winter on the Low Side**

**Sources: EIA, Short-Term Energy Outlook, May 2003**

**Proj.**

**History**

**Million Barrels**

## U.S. Propane Stocks Show Strong Winter Draw & Need to Rebuild

***Propane Lower Operational Inventory***

**Source: EIA**

**Proj.**

**History**

## Near-Term Petroleum Market Outlook

**World Oil Supply:****Global stock build expected**
**World Oil Prices: ****No near-term collapse expected;**
**                                       **
**U.S. Stocks:**	**Crude, distillate expected to be tight ****	****	****	****for several months;**
**                                ****Slow recovery expected**
**Consumption:**	**U.S. petroleum demand expected to ****	****	****	****increase 2.3 percent in 2003 and        ****	****	****	****2004**

## Petroleum Supply, Consumption, and Imports, 1970-2025(million barrels per day)

**1970**

**1980**

**1990**

**2000**

**2010**

**2025**

**0**

**5**

**10**

**15**

**20**

**25**

**30**

**Domestic supply**

**Consumption**

**History**

**Projections**

**Net imports**

**55%**

**68%**

**Petroleum Supply, Consumption, and Imports, 1970-2025****(million barrels per day)**

## U.S. Petroleum Consumption by Sector, 1990-2025(million barrels per day)

**U.S. Petroleum Consumption by Sector, 1990-2025**(million barrels per day)

**Industrial**

**Electric generators**

**Residential and Commercial**

**Transportation**

**Projections**

**History**

## NATURAL GAS

## U.S. Natural Gas Price Projection Shows Continued Market Tightness

**Source: Reuters Spot Prices, EIA Short-Term Energy Outlook, May 2003**

**Proj.**

**History**

## Factors Driving Natural Gas Prices

**Prices encourage drilling, but must both fill depleted storage and meet demand**
**Demand expected to fall slightly in 2003 then increase in 2004**
**Economic recovery will increase industrial demand in 2004**
**High crude price (less fuel switching)**
**Growing gas-fired electricity capacity**
**Supply picture is mixed**
**Need increasing completion rates to offset high decline rates of new wells**
**Expect net imports in 2004 to remain at 2003 level**
**Storage refill is a question **

## Demand Growth Expected in 2004, But Level Stays Below 2000 Peak 

## Projected Natural Gas Demand Increases Stem from Several Factors

**Sources: Federal Reserve Board, EIA March Short Term Energy Outlook,**
**RDI Corporation (2003 Electricity Capacity)**

## U.S. Natural Gas Production Growth Requires High Rig Growth

**Sources: EIA, Baker Hughes Gas Rig Counts, **
**Short-Term Energy Outlook, May 2003**

## Natural Gas Storage  

**Natural Gas Storage  **

**Source: EIA**

**History**

**Projections**

**Billion Cubic Feet**

## Natural Gas Stocks are Beginning to Recover from Winter Lows

**Natural Gas Stocks are Beginning to Recover from Winter Lows**

## Natural Gas Volumes Needed For Selected Storage Refill Targets

**Natural Gas Volumes Needed For Selected Storage Refill Targets**

- 2,700 Bcf

- 3,000 Bcf

- Volume needed if target is:

**Working Gas Refill Volumes By Year**

## Near-Term Natural Gas Market Issues

**Supply:**		Will supply increase enough to satisfy 				growth  in consumption? Will Boom and 				bust cycles discourage investment?
**Weather:****	**	The possibility of a hot summer or cold 				winter would put upward demand pressure 			on gas markets.
**Storage:**		Will refill be adequate for next winter’s 				demand?
**Consumption:**	Will forecasted growth in natural gas  				consumption be realized? How will 				consumption be affected by price volatility, 			fuel competition and service requirements
-                                        of electric generators?
**Pipelines:**	    	Will necessary capital investments be 				made to expand delivery capability?

## Natural Gas Supply, Consumption, and Imports Are Projected to Expand Through 2025(Trillion cubic feet)

**Natural Gas Supply, Consumption, and Imports Are Projected to Expand Through 2025****(Trillion cubic feet)**

## U.S. Natural Gas Consumption by Sector, 1990-2025(trillion cubic feet)

**History**

**Industrial**

**Electric generators**

**Residential**

**Commercial**

**CNG vehicles**

**Projections**