The government's latest energy forecast calls for lower gasoline prices this summer and lower oil prices for the year.
The Energy Department's Energy Information Administration released its monthly Short-Term Energy Outlook on Tuesday. EIA expects crude oil prices to average $79 a barrel this year and $83 a barrel in 2011. Both forecasts are $3 lower than a month ago. Oil prices have fallen about 15 percent in the last month on worries about the European debt crisis and tighter credit in China.
EIA said the benchmark crude prices dropped further than some other oil prices because of record high inventories at the oil hub in Cushing, Okla.
The Energy Department sees average gasoline pump prices at $2.79 a gallon during the summer driving season between April 1 and Sept. 30. That's 15 cents lower than the forecast last month, but 35 cents higher than the summer average a year ago.
EIA also offered an estimate for what the six-month moratorium on exploratory deepwater drilling will mean for oil production. Crude production should be down about 26,000 barrels per day in the fourth quarter and 70,000 barrels per day lower in 2011. Production in the Gulf of Mexico totaled 1.7 million barrels per day in the first quarter.
The current hurricane season could cut crude production by 26 million barrels between June and November, if big storms force oil platform shutdowns. Natural gas production could be reduced by 166 billion cubic feet.
Natural gas prices should rise this year to an average $4.49 per million BTU, up 54 cents per million BTU from last year.
EIA expects residential electricity prices to rise slightly this year to an average 11.6 cents per kilowatt-hour from 11.5 cents in 2009.
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