By PAUL REKOFF
US officials cut their forecasts for domestic crude oil prices by nearly a dollar for this year's last three months.
Spot prices for West Texas Intermediate, the US benchmark, will average $88.51/bbl in the fourth quarter, according to the December edition of the US Energy Department's Short-Term Energy Outlook.
That's down from the $89.50/bbl that was predicted in November's report. The Energy Department's Energy Information Administration puts out its forecast of prices and industry conditions monthly.
Other than the drop in US crude prices, the forecasts did not vary much from the previous month's outlook.
The fourth-quarter gasoline price forecast fell to $3.52/gal from November's prediction of $3.56; diesel fuel rose to $4.02/gal from $4.00 and home heating oil inched down to $3.85/gal from $3.86.
Spot natural gas prices, at the Henry Hub, were predicted to rise to $3.50 a million British thermal units, from $3.46 mmBtu.
However, the natural gas prices were one of the few to move more than a few cents in terms of forecasts for 2013. The year-long prices climbed to $3.68/mmBtu from the $3.49/mmBtu predicted in November.
Natural gas prices have steadily climbed all year after increased production combined with a weak demand from a warmer-than-normal winter to produce a glut of the home heating fuel.
Prices fell below $2.00, a 10-year-low, until utilities began substituting it for coal. The price rise has accelerated over the last three months, with prices rising about $1 per million British thermal units.
All the rest of the changes to the 2013 forecasts from November's report did not move more than a few pennies. The exception was for the spot crude prices. The forecast for US crude rose to $88.38/bbl from November's $88.29/bbl, while the prediction for Brent rose to $103.75/bbl from $103.38.
Dow Jones Newswires