Crude petroleum and natural gas - Industry Overview

US Industrial Outlook, Annual, 1992

Crude Oil

U.S. refiner acquisition costs for both domestic and imported crude oil are expected to average $20.25 a barrel in 1992, an increase of about 6 percent from a year earlier (Table 5). By the end of the year the price could reach $21 a barrel. Similar increases are expected in the wellhead price of domestically produced crude oil (Tables 6 and 7). Prices could be substantially lower if the embargo on Iraqi oil exports is removed without compensating downward adjustments in exports by other OPEC members. Conversely, prices could be higher if economic growth is more rapid than expected or if oil exports from the Soviet Union fall more rapidly than is currently assumed.

Table 5: U.S. Refiner Acquisition Cost of imported
and Domestically Produced Crude Oil, 1987-92
                                      U.S.-
              Imported              Produced
                 Crude                Crude
                      Price                   Price
           Price      Index       Price       Index
Year   $/barrel)   (1987=100)   ($/barrel)  (1987=100)
1987      18.13        100.0        17.76      100.0
1988      14.56         80.3        14.74       83.0
1989      18.08         99.7        17.87      100.6
1990      21.78        120.1        22.60      127.3
1991(1)   19.12        105.5        19.30      108.7
1992(2)   20.25        111.7        20.25      114.0
(1) Estimate.
(2) Forecast.
SOURCE: U.S. Department of Energy, Energy Information
Administration.

Table 6: U.S. Wellhead Prices of Domestically
Produced Crude Oil and Natural Gas, 1987-92

                       Natural Gas(1)
          Crude Oil    ($/thousand
Year      ($/barrel)   cubic feet)

1987       15.40       1.67
1988       12.58       1.69
1989       15.86       1.69
1990       20.03       1.72
1991(2)   16.673       1.69
1992(4)     NA         1.85
(1) Wet natural gas before extraction of natural gas plant liquids.
(2) Estimate.
(3) Crude oil price is the average for the first 5 months.
(4) Forecast.
NA = not available.
SOURCE: U.S. Department of Energy, Energy information
Administration.

Table 7: U.S. Wellhead Prices of Domestically
Produced Crude Oil and Natural Gas in 1982
           Dollars, 1987-90
            (in cents per million Btu)

Year  Crude Oil(1)  Natural Gas(2)

1987   226.1        127.9
1988   178.8        125.6
1989   216.5        120.9
1990   262.6        118.2
(1) Includes lease condensate.
(2) Wet natural gas before extraction of natural gas plant liquids.
SOURCE: U.S. Department of Energy, Energy Information Administration.

U.S. petroleum consumption is expected to be nearly 17 million barrels a day in 1992, a level 2 percent greater than for the prior year, which is consistent with the expected moderate economic growth rate (Table 3). The largest increase in consumption will likely be for distillate fuel oil if winter temperatures are normal. Little or no change is expected in the consumption of motor gasoline as automotive fuel efficiency continues to improve. Demand for residual fuel oil will continue to fall, partly because of continuing substitution of natural gas in the non-utility sectors (see chapter 4).