Short Term Energy Outlook 1/1/08

[Curtis]

Energy prices effect every level of our lives. I will continue to post the Energy Commissions Short Term Energy Outlook so that you may gain some insight into what lies down the road ahead of you.

• The $80-plus per barrel projected crude oil prices are likely to result in historically high prices for the major petroleum products. Residential heating oil prices are projected to average $3.23 per gallon this heating season, a 30-percent increase over the previous heating season. Both motor gasoline and diesel prices are projected to average well over $3 per gallon in 2008, with gasoline prices peaking at over $3.40 per gallon next spring.

• Working natural gas in storage was 3.44 trillion cubic feet (tcf) as of November 30. This high level of storage going into the heart of the winter, combined with limited remaining fuel switching capability, has insulated the natural gas market from the impact of the recent price increases in petroleum markets to some extent. Consequently, while petroleum product prices are expected to increase and remain historically high, only moderate gains are expected for natural gas prices through 2008. The Henry Hub natural gas spot price is expected to average about $7.21 per thousand cubic feet (mcf) in 2007 and $7.78 per mcf in 2008. Average household natural gas expenditures this winter are expected to show an increase of about 7 percent compared with last winter.

Hang in there gang, the CNG road seems to continue to be the smoothest choice by far... not to mention, the road less traveled.

[cnielsen]

Re: Short Term Energy Outlook 1/1/08

From a Northern CA/San Jose/San Fran perspective:

I believe the cost per gallon of unleaded to breach the $4.00 during 2008. I do not see it going below $3.00 except for very brief periods of time.

People do not seem to have curtailed their usage of motor vehicles. You would have thought the $3.00 mark would have caused people to think twice about the amount of gas they are using. I still see cars/trucks driving 80Mph + going down the freeway getting < 15 mpg. I attribute this to easy credit and not seeing the whole cost of driving a car.

People are now used to the $3 range of gas. Once it starts to breach $4 people will start thinking that $3.40 is not a bad price to pay .

I do see the price of CNG raising as well but staying ~$1.00/gge less than regular unleaded. For those in Utah, I dont see it breaking $1.00/gge anytime soon!

http://www.mercurynews.com/ci_7855716?IADID