DOE raises production lost to drilling moratorium

WASHINGTON

The government said Wednesday that the moratorium on drilling for oil in the Gulf of Mexico would result in crude production cuts of 31,000 barrels a day in the fourth quarter. That's an increase of 5,000 barrels a day from last month.

The Energy Department's monthly Short-Term Energy Outlook also forecast a drop of 82,000 barrels per day in 2011, up from a June estimate of 70,000 barrels per day.

The Obama administration put a six-month moratorium on deepwater drilling in the Gulf on May 27 following the sinking of the oil rig Deepwater Horizon in April. The government is appealing a federal judge's ruling that lifts the drilling moratorium.

The EIA's Outlook sees the price of benchmark crude averaging $79 a barrel over the second half of this year and $83 a barrel next year. The government says gasoline pump prices should average $2.80 for a gallon of regular during the summer driving season compared with $2.44 last summer.

EIA thinks the price of natural gas will increase because of an active hurricane season, since those storms can disrupt production and delivery. The Outlook predicts spot prices will average $4.70 per million BTU this year, up 75 cents from the 2009 average and a 22-cent increase from EIA's June Outlook.

The forecast for annual residential electricity prices is up slightly in this month's Outlook, to an average of 11.6 cents per kilowatthour from 11.5 cents last month.