WASHINGTON (AP) -- The government's latest energy forecast calls for higher oil and slightly higher retail gasoline prices for the rest of the year.
In its short-term energy outlook released Tuesday, the Energy Department's Energy Information Administration forecast crude oil will average $80 a barrel in the second half of the year and $85 a barrel by the end of 2011. That's up slightly from an average oil price of $76.32 a barrel in July.
The agency attributed rising prices to an expected increase in oil demand due to a global economic recovery. At the same time, it said there would be a gradual reduction in global oil inventories.
EIA expects retail gasoline prices to average $2.77 per gallon through 2010, up about 1 cent per gallon from the first six months of the year. Gasoline prices averaged $2.35 a gallon in 2009.
EIA said domestic crude oil production should increase by 110,000 barrels a day to 5.43 million barrels a day this year.
The agency also said a six-month government moratorium on exploratory deepwater drilling likely will lead to an average reduction of 82,000 barrels a day in Gulf of Mexico production.
EIA expects overall crude production to increase by 30,000 barrels a day to 5.46 million barrels a day in 2011.
The moratorium was imposed following the explosion and sinking of a BP PLC well on April 20, which sent millions of gallons of oil into the Gulf. BP has stopped the flow temporarily and is working to install a permanent plug.
EIA said natural gas prices this year should average about $4.69 per million BTU, an increase of 74 cents per million BTU over the 2009 average price. It forecast an average price of $4.98 per million BTU in 2011.
EIA expects residential electricity prices to average 11.6 cents per kilowatt-hour in 2010, compared with 11.5 cents in 2009.
