This is an excerpt from EERE Network News, a weekly electronic newsletter.

December 07, 2005

EIA Expects High Energy Prices Through 2006

Energy prices will remain high through 2006, with crude oil prices averaging $63 per barrel, retail regular gasoline averaging $2.41 per gallon, and natural gas averaging $9.30 per thousand cubic foot, according to the latest projections from DOE's Energy Information Administration (EIA). The EIA's "Short Term Energy Outlook," released on December 6th, expects elevated energy prices in light of continuing tight international supplies and hurricane-induced supply losses, combined with a projected 2 percent increase in U.S. energy demand. There is some good news, though: October and November were warmer than anticipated, so the EIA has slightly reduced its projections for this winter's heating costs. See the EIA's "Short Term Energy Outlook."

According to Monday's "Gulf Coast Hurricanes Situation Report," issued by DOE, about 34 percent of Gulf oil production and 27 percent of Gulf natural gas production remains unavailable. According to the Department of Interior's Minerals Management Service (MMS), so far the Gulf has lost 18 percent of its annual oil production and 14 percent of its annual natural gas production because of the storms. Two refineries in Louisiana and one in Texas remain shut down, while one refinery in each state is operating at a reduced rate. See the latest DOE and MMS reports.