Crude prices up on short-term outlook from EIA

Crude oil prices were slightly higher in afternoon trade on Tuesday after the US Energy Information Administration issued it’s monthly Short-Term Energy Outlook.

The EIA predicted that crude oil prices will average $79 per barrel in the second half of this year, down from its projection of an average of $84 per barrel in last month’s report, although the report also said that prices could go higher if facilities in the Gulf of Mexico region had to be shut down due to storms in a predicted active hurricane season.

The report said that storm closures could cut production of crude oil by 26 million barrels and natural gas production by 166 billion cubic feet, and further predicted that the six-month moratorium on deep-water drilling in the Gulf of Mexico due to the oil spill could reduce production by 26,000 barrels per day in the fourth quarter of this year and by 70,000 barrels per day next year.

July contracts for West Texas Intermediate crude were up 14 cents to $71.58 per barrel at around 1:30 p.m. on the New York Mercantile Exchange, while at last report Brent crude had added 30 cents to $72.42 per barrel on the ICE Futures Europe exchange in London.

Nymex July gasoline futures were 2 cents higher to $2 per gallon while July heating oil future had added 3 cents to $1.98 per gallon but July natural gas was 19 cents lower to $4.77 per million British thermal units.

The retail price of a gallon of regular unleaded gasoline was down another 0.6 cent overnight to $2.718 per gallon on average, according to AAA.