World oil prices, which increased in 1999 and 2000, are projected to begin falling in 2001, according to a new Annual Energy Outlook 2001 from the U.S. Department of Energy's Energy Information Administration.
Natural gas prices, which also increased in 2000, are expected to decline within two years. In the longer term, technology improvements in the exploration and production of oil and gas are expected to moderate price increases even as demand for these fuels grows.
EIA projects world oil prices will be $22.41 per barrel in 2020, similar to last year's projection. In the interim, the price of a barrel of crude is projected to cost $27.60 in 2000, $20.83 in 2005, $21.37 in 2010 and $21.89 in 2015.
The average wellhead price of natural gas is expected to reach $3.13 per Mcf in 2020, 10 percent higher than forecast last year due to greater expected demand for natural gas over the coming decades, primarily for electricity generation.
The EIA study expected crude production in the Caspian Sea Basin to reach 6 million b/d in 2020, with production expanding in areas offshore West Africa and the North Sea.
While production is expected to decline in the U.S. at a rate of about 1 percent annually over the next 20 years, production is forecast to increase in Brazil, Colombia, Canada and Mexico.
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