Washington, 7 September 2011

EIA’s economic growth assumptions have been lowered substantially compared with last month’s Outlook. This forecast assumes that U.S. real gross domestic product (GDP) grows by 1.5 percent this year and 1.9 percent next year compared with 2.4 percent and 2.6 percent, respectively, in the previous Outlook. World oil-consumption-weighted real GDP grows by 3.1 percent and 3.8 percent in 2011 and 2012, respectively, compared with 3.4 percent and 4.1 percent in the last Outlook. With weaker economic growth and lower petroleum consumption growth, EIA expects the U.S. average refiner acquisition cost of crude oil to rise from an average of $100 per barrel in 2011 to $103 per barrel in 2012, compared with an increase to $107 per barrel in 2012 in last month’s Outlook.

Regular-grade gasoline retail prices fell 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 following a decline in crude oil prices.  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.

Natural gas working inventories ended August 2011 at 3.0 trillion cubic feet (Tcf), about 5 percent, or 144 billion cubic feet ( Bcf), below the 2010 end-of-August level. EIA expects that working natural gas inventories will approach last year’s high levels by the end of this year’s injection season.  The projected Henry Hub natural gas spot price averages $4.20 per million British thermal units (MMBtu) in 2011, $0.18 per MMBtu lower than the 2010 average. EIA expects the natural gas market to tighten moderately in 2012, with the Henry Hub spot price increasing to an average of $4.30 per MMBtu.

Global coal supply disruptions, particularly in Australia, and growing demand in China have helped boost U.S. coal exports for the first half of 2011 to a 29-year high of 54 million short tons (MMst), an increase of 35 percent compared to the same period in 2010 and double 2009 levels.  EIA expects coal exports to begin to weaken, totaling 45 MMst over the second half of 2011 and 87 MMst in 2012.

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