The EIA's latest "Short-Term Energy Outlook," released Jan. 10, expects crude oil to average $63 per barrel this year and $60 per barrel in 2007. Retail standard gasoline prices, which averaged $2.27 per gallon in 2005, are projected to average $2.41 in 2006 and $2.33 in 2007.
Standard gasoline currently averages about $2.33 per gallon, so the EIA projection calls for increasing prices.
Natural gas is predicted to increase for 2006. 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 to $8.84 per mcf in 2007.
Meanwhile, oil and natural gas production in the Gulf of Mexico continues its slow recovery from hurricanes Katrina and Ivan. By Jan. 11, 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.
Last week, a government report on the impact of the hurricanes, noted they 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.
The report expects 17 percent of oil production and 4 percent of natural gas production to remain offline when the hurricane season begins June 1.
