The department's Energy Information Administration (EIA) said that the 23 June decision by the Obama administration to release some 30m bbl of oil from the US Strategic Petroleum Reserve (SPR) had only temporary impact on crude pricing - and perhaps no effect at all.
The White House announced on 23 June that it would sell 30m bbl of US emergency crude oil supplies from the SPR as half of a 60m bbl release by member nations of the International Energy Agency (IEA) in a bid to moderate petroleum prices worldwide and especially gasoline prices in the US.
"World crude oil prices initially fell following the 23 June announcement," the EIA said in its monthly short-term energy outlook (STEO), "but then rose above the pre-announcement levels in late June and early July."
Whether the 60m-bbl release of emergency crude supplies had any impact on the global oil price was questionable, the EIA noted.
"Attributing observed price changes since 23 June to the IEA announcement is difficult because other drivers, including changing expectations of world economic and crude oil consumption growth, uncertainty over oil supply disruptions, estimates of OPEC spare production capacity and other physical and financial factors are continually affecting oil prices," the outlook said.
"Although the IEA release will provide some additional supply, EIA expects oil markets to tighten through 2012," the report added.
Based on expected expansion of global oil demand and slowing growth in oil supply from non-OPEC producing countries, the outlook said that "the projected US average refiner acquisition cost of crude oil rises from $102/bbl in 2011 to $108/bbl in 2012".
However, that 2012 price forecast for $108/bbl crude was a dollar less than the administration had predicted in last month's outlook.
In natural gas, the Energy Department said that it expects US working gas inventories will build strongly during the warm North American summer months and through the rest of this year, keeping downward pressure on natural gas prices.
The EIA said it expects the projected Henry Hub natgas spot price would average $4.27/MMBtu for this year or about 12 cents/MMBtu below the 2010 average price.
But the administration said that this year's lower natgas pricing average would not last into 2012.
"EIA expects the natural gas market to begin tightening in 2012, with the Henry Hub spot price increasing to an average of $4.54/MMBtu," the administration said, meaning a 27 cents/MMBtu increase or 6% from the expected 2011 average.
The price and availability of natural gas is a concern to US petrochemical producers and downstream chemical makers because they are heavily dependent on natural gas as both a feedstock and power fuel.
($1 = €0.71)
