Prices Hold Their Own in the Oil Patch

摘要

With The prospect of war in Iraq on the horizon, the energy industry faced a host of uncertainties going into 2003. Yet by yearend, the sector had racked up blockbuster returns, as the war and a variety of supply shortages kept oil and natural gas prices at near-record levels. Now, with many of those uncertainties gone, prices are expected to decline, though not enough to send the industry into a tail-spin. Expect "a good year for energy, just not as good as last year," says Roger Di-wan of Washington-based industry consultant PFC Energy. The anticipated small dip in prices this year will rein in industry revenues and profits. L. Bruce Lanni of A.G. Edwards & Sons Inc. estimates benchmark West Texas intermediate (WTI) oil prices will average $27 a barrel in 2004, vs. $30.90 last year. On the natural gas front, the U.S. Energy Information Administration (EIA) is forecasting an average price of $4.39 per thousand cubic feet (Mcf) in 2004, vs. $4.92 last year. The upshot: The 23 energy firms in tie Standard & Poor's 500-stock index will post a 10% decline in revenues and a 17% drop in earnings in 2004, according to Thomson First Call. That compares to an earnings jump of 54% on a 9% sales gain in 2003.