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Wellhead Prices Drop; Electric Growth Slows

Fortnightly Magazine - June 15 1996

The Energy Information Administration has released its second-quarter Short-Term Energy Outlook projections. Some of its predictions for gas and electric markets:

s Normal temperatures and continued economic growth will raise total annual gas demand in 1996 to a high of 21.9 trillion cubic feet. In 1997, demand is expected to rise 2.7 percent, to 22.5 trillion cubic feet.

s In 1997, the average wellhead price should decline by 15 cents per thousand cubic feet as normal winter weather, continued market efficiencies, increased domestic production, and growing Canadian imports offset rising demand.

s Annual average residential electricity prices should remain nearly flat through 1997 due to moderate costs for labor, capital, and fossil fuels.

s Growth in electricity demand will continue to boost coal demand (em by 0.8 percent in 1996, and 1.7 percent in 1997.

s In 1996-97, total electricity demand will grow at a considerably slower rate than 1995's 3-percent figure, based on lower expectations for economic growth and assumptions of normal weather.

s Commercial sector demand will rise by 1.7 percent this year and by 1.3 percent in 1997, primarily because of expanding employment. Industrial demand is projected to grow by only 0.7 percent this year, jumping 1.9 percent in 1997 as the economy rebounds.

The report may be purchased from the U.S. Government Printing Office by calling (202) 512-1800. (em JS


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