Energy Prices will Stay High

Crude oil prices soared last year amid strong demand and tight supplies, and could rise even higher in 2006 as the U.S. implements clean fuel rules and world energy needs remain strong. The Paper industry, a large consumer of energy, will certainly feel the cost pressures and continue to attempt price increases.

The 2005 average U.S. price for a barrel of crude oil was just under $57, a new record and an increase of 37% from the 2004 average price of just above $41. Despite expectations of tighter supply and high prices, experts at the U.S. Energy Information Administration say demand growth will remain resilient. Tougher U.S. sulfur requirements for gasoline and diesel could cut supplies as refiners shut plants to revamp units, and foreign suppliers find other markets with less stringent regulations, slashing U.S. imports.