The latest Oil & Gas Germany Report forecasts that the nation will account for 17.84% of developed European regional oil demand by 2014, while making a contribution of just 1.08% to supply. In Developed Europe, overall oil consumption is forecast to average an estimated 13.10mn barrels per day (b/d) in 2010. It is set to recover to around 13.29mn b/d by 2014. Developed Europe regional oil production was 6.96mn b/d in 2001, and is expected to average an estimated 4.45mn b/d in 2010. It is set to fall to just 3.69mn b/d by 2014. Oil imports are growing steadily because supply is contracting and demand is rising, albeit slowly. In 2010, net crude imports are set to be an estimated 8.65mn b/d. By 2014, they are expected to have reached 9.60mn b/d. Norway will remain the only major net exporter, with the UK a net importer.

 

As regards natural gas, the Developed Europe region is expected to consume an estimated 419.5bcm in 2010, with demand of 458.1bcm targeted for 2014, representing 9.2% growth. Production of an estimated 259.3bcm in 2010 is set to fall to 259bcm in 2014, which implies net imports rising from the estimated 2010 level of 156.6bcm to some 199.1bcm by the end of the period. Germany’s share of gas consumption in 2010 will be an estimated 19.07%, while it will account for around 4.63% of production. By 2014, its share of gas consumption is forecast to be 18.90%, with a 4.05% share of production.

 

For 2010 as a whole, we continue to assume an average OPEC basket price of US$83.00/bbl (+36.4% yo- y). Risk is now clearly on the downside, thanks to the slow progress made during June-August.

 

However, a full year outturn in excess of US$80 remains a strong possibility and we see no need to review our assumptions at this point. We are assuming an OPEC basket price of US$85.00/bbl in 2011, with WTI averaging US$89.74. Our central assumption for 2012 and beyond is an OPEC price averaging US$90.00/bbl, delivering WTI at just over US$95.00.

 

For 2010, the assumption for premium unleaded gasoline is an average global price of US$95.45/bbl. The overall y-o-y rise in 2010 gasoline prices is put at 36%. Gasoil in 2010 is expected to average US$93.23/bbl. The full-year outturn represents a 35% increase from the 2009 level. For 2010, the annual jet price level is forecast to be US$95.90/bbl, compared with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$83.53/bbl, up 41% from the previous year’s level.

 

Forecasts German real GDP growth of 2.0% in 2010. We are assuming 1.7% average annual growth in 2010-2014. Our forecast is for minimal oil demand growth to 2014, with end-period consumption at no more than 2.37mn b/d after declining demand in 2009/10. Gas consumption is now 24% of primary energy demand, accounting for 11% of power generation supply. Our estimate is for gas demand to rise from an estimated 80bcm in 2010 to 86.6bcm by 2014. Germany’s gas production is forecast to fall from an estimated 12.0bcm in 2010 to 10.5bcm over the period.

 

Between 2010 and 2019, we are forecasting a decline in German oil and gas liquids consumption of 7.40%, with volumes peaking at 2.41mn b/d in 2011, then heading lower to 2.26mn b/d by the end of the 10-year forecast period. Production is set to fall from an estimated 52,000b/d to just 25,000b/d during the same period. Gas demand should rise from the estimated 2010 level of 80bcm to a peak of 90bcm by 2017/2018, before slipping back to 88bcm by 2019. Imports are expected to peak at 81bcm in 2018, in the form of pipeline volumes.

Coal is the most important mineral in Germany. The nation is a major producer of anthracite and a world leader in the production of lignite. Anthracite is produced primarily in western Germany, especially in the Ruhr and in the Saar. It is used mainly by the iron and steel industry. Lignite is mined largely in eastern Germany, especially near Cottbus. It is used chiefly to generate electric power and to produce coal gas, and by the chemical industry as a raw material.

Germany is also a major producer of potash and gypsum. Other minerals produced include lead, zinc, copper, nickel, salt, and sulfur. Germany imports most of its iron ore, mainly from Brazil, Ukraine, Canada, and Australia.

 

Average electricity proceeds up 5.8% in 2008
According to our calculations, the average proceeds from electricity (price ceiling) in 2008 amounted to 9.06 cents per kilowatt hour. Compared with the previous year, the price ceiling thus rose 5.8%.The legal definition of the price ceiling is the average proceeds per kilowatt hour obtained by the electricity supply industry from electricity sales to special-contract customers.

The average proceeds from supplies to all final consumers were 11.53 cents per kilowatt hour. That was a 5.5% increase on 2007. Regarding electricity supplies to regular customers (households and extremely small consumers), the electricity supply industry obtained average proceeds of 16.54 cents per kilowatt hour in 2008, which was 2.7% more than in 2007.

The threshold price is legally defined as average proceeds per kilowatt hour of the utility enterprises, calculated from electricity supplied to all special contract customers. Public utilities use it as a basis for calculating concession fees. That are charges to be paid by public utilities to the municipalities for the right to supply final consumers with electricity and to use public traffic routes for laying and operating cables.

The average proceeds or the threshold price is shown excluding value-added tax and excluding retroactive electricity tax reimbursements, but including system usage fees, electricity tax, concession fees and compensation charges according to the renewable energies law and the law on combined heat and power.

Average gas proceeds amounting to 4.23 cents/kWh in 2008

 

The average gas proceeds (price ceiling) amounted to 4.23 % per kilowatt hour in 2008. Compared with the previous year, the price ceiling thus was up by 15.3%. The legal definition of the price ceiling is the average proceeds per kilowatt hour obtained from gas supply to all final consumers; it is shown exclusive of VAT.

Regarding gas supplies to households, the gas supply industry obtained average proceeds of 5.69 cents per kilowatt hour in 2008, which was 9.4% more than in 2007. The average proceeds from gas supplies to industry amounted to 3.36 cents per kilowatt hour in 2008. That was a 21.3% increase on 2007.