EIA outlook calls for oil prices to remain firm through at least autumn

Average crude oil prices for July were little changed from June, and the U.S. Department of Energy’s Energy Information Administration said Aug. 6 in its short-term energy outlook that it expects prices to remain firm through at least autumn. The West Texas Intermediate crude spot price for July was $30.75 per barrel, compared to $30.66 in June. Prices may slide gradually in the fall, once oil inventories rebuild in Organization for Economic Cooperation and Development countries. Then “oil prices may slide gradually to $26 per barrel during 2004, as Iraqi oil exports return to near pre-war levels.”

Working natural gas in storage at the end of July is estimated at 17 percent below end-of-July 2002 levels, and about 9 percent below the previous five-year average, which “bolsters the chance that natural gas inventories may return to normal by the start of the heating season.”

The third quarter average well head price is projected at $4.63 per thousand cubic feet, and the agency said: “A good chance exists for spot prices for natural gas at the Henry Hub to remain below $5 per million Btu for the remainder of the summer.”