# Presentation: 641629

## Winter 2004-2005 Fuels Outlook

**Presented by****Guy Caruso****EIA Administrator**

***2004 NASEO/EIA Winter Fuels Outlook Conference***
***        ******October 6, 2004***

**Winter 2004-2005 Fuels Outlook**

## Household Winter Heating Fuel Summary

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

**Household Winter Heating Fuel Summary**

***Base case demand mixed; expenditures up all around***

## Economic Growth Assumptions for the Forecast

**Economic Growth Assumptions for the Forecast**

***Economic recovery continues into 2005***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Heating Demand Indicators:Probability Ranges for Degree-Days* This Winter

**  U.S. Population-weighted heating degree-days*

**Heating Demand Indicators:****Probability Ranges for Degree-Days* This Winter**

***Winter weather likely to be colder this year (except in January)***

**Sources: History:  NOAA;  Projections: Climate Prediction Center; Ranges: EIA.**

## WTI Crude Oil Spot Price

**WTI Crude Oil Spot Price**

***Average winter WTI prices sharply higher again (3******rd****** year running)***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

- Projections

## World Oil Demand Growth

***World oil demand growth currently surging at very high rates***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## World Oil Spare Production Capacity

**World Oil Spare Production Capacity**

**Projections**

***Spare global capacity at lowest level in 30 years***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## OECD Commercial Oil Stocks

**OECD Commercial Oil Stocks**

***OECD oil stocks remain in low range***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## U.S. Commercial Crude Oil Stocks

**U.S. Commercial Crude Oil Stocks**

***US crude oil stocks likely to remain tight (again) this winter***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## U.S. Petroleum Demand Growth by Fuel

**U.S. Petroleum Demand Growth by Fuel**

***U.S. demand growth likely to slow in 2005 under high prices***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

**1.4%**

**1.9%**

**1.2%**

## Winter Distillate Demand

***Some growth in distillate demand expected this winter, especially Q4***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## U.S. Total Distillate Fuel Inventories

**U.S. Total Distillate Fuel Inventories**

***US distillate fuel stocks near middle of 5-year average (for now)***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Distillate Fuel Oil Imports

***Distillate net imports for the winter about even with last year***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Distillate Fuel Price Outlook

**Distillate Fuel Price Outlook**

***Heating oil winter price to reach new average high this winter***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Retail Heating Oil Price

**Retail Heating Oil Price**

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

***Heating oil winter price to reach new average high this winter***

- Projected

## U.S Natural Gas Spot Price Outlook (Henry Hub)

**0**

**1**

**2**

**3**

**4**

**5**

**6**

**7**

**8**

**9**

**10**

**Jan-02**

**Mar-02**

**May-02**

**Jul-02**

**Sep-02**

**Nov-02**

**Jan-03**

**Mar-03**

**May-03**

**Jul-03**

**Sep-03**

**Nov-03**

**Jan-04**

**Mar-04**

**May-04**

**Jul-04**

**Sep-04**

**Nov-04**

**Jan-05**

**Mar-05**

**Dollars per Thousand Cubic Feet**

**Actual/Base**

**10%**

**Colder**

**10%**

**Warmer**

**U.S Natural Gas Spot Price Outlook (Henry Hub****)**

***High average natural gas prices average likely; spikes if cold***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

- Projected

## U.S. Winter Natural Gas Demand Growth

**U.S. Winter Natural Gas Demand Growth**

***Weather, increased power sector demand drives winter gas demand***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Working Gas in Underground Storage (billion cubic feet)

**Working Gas in Underground Storage ****(billion cubic feet)**

***Strong builds increase natural gas stocks above historical averages***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## U.S. Propane Inventory (million barrels)

**U.S. Propane Inventory (million barrels)**

***Propane stocks are likely to remain within the historical range***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

**0**

**10**

**20**

**30**

**40**

**50**

**60**

**70**

**80**

**Jan-02**

**Mar-02**

**May-02**

**Jul-02**

**Sep-02**

**Nov-02**

**Jan-03**

**Mar-03**

**May-03**

**Jul-03**

**Sep-03**

**Nov-03**

**Jan-04**

**Mar-04**

**May-04**

**Jul-04**

**Sep-04**

**Nov-04**

**Jan-05**

**Mar-05**

**Million Barrels**

**Actual/Base**

**10%**

**Warmer**

**10%**

**Colder**

**Previous 5-year**

**Min/Max Range**

## Residential Propane Price

**Residential Propane Price**

***Retail propane prices above last winter’s average***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## U.S. Winter Electricity Demand Growth

**U.S. Winter Electricity Demand Growth**

***Electricity demand growth expected to be strong this winter***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, October 2004.**

## Summary

*** ******Oil and gas markets are tight and vulnerable to demand shocks:*****  **
**        ****	****For now, inventories for heating fuels are near normal or above ****	****normal.**
***Net changes in residential heating expenditures this winter:******                    ******	***** plus 28 percent for heating oil;**
** ****plus 15 percent for natural gas; **
** ****plus 6 percent for electricity; **
** ****Plus 22 percent for propane.**
***Uncertainties:***
***	***** ****Weather;**
**	**** ****Supply security in Iraq, Nigeria, elsewhere;**
**	**** ****OPEC production decisions; and **
**	**** ****Unexpected supply disruptions**