-- U.S. oil demand seen near 20 million barrels a day in 2035
-- Domestic crude oil output expected to rise 0.4% annually through 2035
-- Net import share of U.S. oil demand to drop
NEW YORK--U.S. oil demand will grow by a modest 0.2% a year through 2035, capped by increased energy efficiency and rising prices, and won't top the 2005 peak, according to government projections released Monday.
The Energy Information Administration's forecast is based on an extended economic recovery, with real U.S. gross domestic product growth of 2.5% a year between 2010 and 2035, moderate population growth, improved technologies brought on by stricter federal and state regulations and higher energy prices.
The price of low sulfur light crude is expected to rise by 2.4% a year between 2010 and 2035, to a record high just under $145 a barrel, in 2010 dollars.
Oil demand is expected to top out at 19.99 million barrels a day in 2035, up 770,000 barrels a day from 2010, but well below the 2005 peak of 20.8 million barrels a day. Biofuel use, much of it domestically produced, will decrease oil demand by the equivalents of 1.2 million barrels a day of crude oil between 2010 and 2035, the EIA said.
Gasoline demand, dropping 0.4% per year, is expected to average just over 8 million barrels a day in 2035, the lowest level since 1998, based on existing fuel economy standards. Proposed fuel economy standards for 2017 to 2025-model year light duty vehicles could further reduce demand for the most widely used petroleum product in the world's biggest oil consumer, the EIA said.
U.S. oil output, with production from shale oil fields outpacing declines in Alaska, will peak at 6.7 million barrels a day in 2020, a rise of 1.2 million barrels a day from 2010, and the most since 1993. Helped by ongoing development in the U.S. Gulf, crude oil output in 2035 will be near 6 million barrels a day, or an annual growth rate of 0.4% since 2010.
Rising domestic supply will trim U.S. net crude oil imports by 0.8% a year through 2035, when they will average 7.5 million barrels a day. Net crude oil and petroleum products imports are projected to drop by 1.2% a year through 2035, reducing the share of petroleum demand met by imports to 36.2% from nearly 50% in 2010. Expenditures on imported crude oil and petroleum products are expected to rise by 1.9% through 2035.
U.S. oil reserves are expected to rise by 1.1% a year to 2035.
Write to David Bird at david.bird@dowjones.com
(END) Dow Jones Newswires
June 25, 2012 13:25 ET (17:25 GMT)
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