EIA: SHORT TERM ENERGY OUTLOOK

By EIA - Energy Information Administration
Tuesday, October 7, 2008

WASHINGTON, DC--

Overview.   Higher oil production in Saudi Arabia during summer 2008 combined with the demand response to extremely high prices and recent credit market problems that point to a lower trajectory for the world economy and oil consumption growth are currently reinforcing the sentiment of a loosening in the global oil balance.   As a result, the recent supply disruptions in the Gulf of Mexico have not resulted in the kind of price increases that would have been expected had they occurred earlier in the year.  

However, unless the global economy is weaker than anticipated, EIA expects that the call on Organization of the Petroleum Exporting Countries’ (OPEC) crude oil will exceed OPEC crude oil production over the next 6 months.  This market balance and the relatively low level of Organization for Economic Cooperation and Development (OECD) commercial oil inventories suggest some upward pressure on prices.  However, if non-OPEC oil production increases as expected during 2009, oil price pressures would then moderate.

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