This is an excerpt from EERE Network News, a weekly electronic newsletter.
EIA: Oil Prices to Exceed $60 per Barrel Through 2007
Prices for oil, petroleum products, and natural gas are expected to remain high through 2007, according to DOE's Energy Information Administration (EIA). The EIA's latest "Short-Term Energy Outlook," released on January 10th, expects crude oil to average $63 per barrel this year and $60 per barrel in 2007. Retail regular gasoline prices, which averaged $2.27 per gallon in 2005, are projected to average $2.41 in 2006 and $2.33 in 2007. Regular gasoline currently averages about $2.33 per gallon, so the EIA projection calls for increasing prices. And while spot prices for natural gas averaged $9 per thousand cubic feet (mcf) in 2005, the EIA expects them to average $9.80 per mcf in 2006 before dropping back to $8.84 per mcf in 2007. True to the forecast, crude oil spot prices have been hovering around $64 per barrel in recent weeks, according to EIA's "This Week in Petroleum" report. See the EIA's "Short Term Energy Outlook" and "This Week in Petroleum," and for the latest prices at the pump, see the American Automobile Association's "Fuel Gage Report."
Meanwhile, oil and natural gas production in the Gulf of Mexico continues its slow recovery from hurricanes Katrina and Ivan. As of January 11th, about 26 percent of the oil production and 18 percent of the natural gas production in the Gulf remains unavailable, which is only about an 8 to 9 percent improvement since early December. With the slow progress, the Department of Interior's Mineral Management Service (MMS) is now only updating its statistics every two weeks; the latest report is due out on January 25th. On January 19th, the MMS also issued a report on the impact of the hurricanes, which were the greatest natural disasters to oil and gas development in the history of the Gulf of Mexico. The report notes that in addition to the previously reported damage to platforms and rigs, 64 large-diameter pipelines were damaged, of which only 22 have returned to service. Looking ahead, the report expects 17 percent of oil production and 4 percent of natural gas production to still be offline when this year's hurricane season begins on June 1st. See the hurricane impact report, and for the latest production statistics, see the MMS home page.