EIA: tough times to bring even lower oil prices

Sure, the global economy is a mess and is expected to stay that way for some time, but the US Energy Information Administration (EIA) sees a bright spot in the morass: cheap oil and natural gas prices.

In its latest “Short-Term Energy Outlook,” released this week, the EIA revised downward its expectations for the world’s gross domestic product in 2009, from the previous forecast of 1.8 to 0.5 percent. The result of that will be a second year of declining global oil consumption — the first two-year drop in three decades, the agency notes.

“The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices,” according to the Outlook. “The status of the global economy has become the most important driver of oil consumption growth and EIA’s oil consumption projections continue to be revised downward in response to lower forecasts for global economic growth.”

The US can also expect 2008 and 2009 to bring a drop in consumption for all petroleum products, the EIA says: 5.8 percent this year and another 1 percent next year.

Oddly, though, despite the downward trend for oil and natural gas prices, US homeowners should brace for higher electricity bills, according to the EIA.

So here’s to the coming new year: you might not be going to work or shopping as much, but it’ll be cheaper to get there when you do.