With oil prices having declined dramatically since mid-2014 due to a combination of global supply and demand issues, the implications for the US economy, as well as for cement consumption have been significant, writes the PCA. It cautions that if oil prices stay near US$30/bbl or lower several consequences to cement consumption could arise that would impact the fall forecast projections.
Given the complex nature of forecasting energy prices, PCA relies on projections from the Energy Information Agency (EIA). At the time of the PCA?s fall forecast, EIA?s 2016 projection for West Texas Intermediate oil price was nearly 30 percent higher than its current projection, and further reductions may be forthcoming. In its latest Market Intelligence report, the PCA said: ?Lower oil prices mean increased fuel savings (heating and automotive) for consumers.
?The negative impacts of low oil prices, such as decreased drilling activity, for every one ton of oil well cement lost from reduced drilling activity.