06-10-04 Fresh off a summer of sky-high gasoline prices, Americans can expect to pay higher home-heating bills this winter amid sharply and persistently higher crude oil prices and below-normal stores of oil and refined products, the US government said.
Increases in residential heating fuel prices are likely to generate higher bills even in regions where demand for fuel is expected to fall, the Energy Information Administration said in its monthly outlook. Average residential natural gas prices are expected to be 11 % higher than a year ago, heating oil prices are seen up 29 % and propane is seen averaging 17 % higher than last winter, with 22 % higher expenditures for propane-heated households.

A number of global supply contractions resulting from events such as the hurricanes that struck the Gulf of Mexico, ethnic unrest in Nigeria, maintenance on North Sea oil installations and problems in Alaska North Slope production have resulted in tightening inventories and pushing already high world oil prices to record highs.
The EIA revised the average price of US benchmark crude West Texas Intermediate higher by about $ 5 a barrel to $ 46.40 for the fourth quarter. A month ago, the agency, the statistical arm of the US Department of Energy, revised the last monthly price, for August, upward by $ 3 a barrel.

The EIA added another six months to its forecast for the earliest that the price of US oil could fall below $ 40 a barrel, suggesting that average monthly WTI prices are not likely to fall below the mark until the end of 2005. The devastating losses dealt to the US oil and gas industry by Hurricanes Charley and Ivan have kept oil inventories in the US and the rest of the industrialized world below normal, the EIA said. The resumption of normal operations could take between 45 and 90 days, according to industry officials, the EIA outlook said.
The amount of Gulf oil production shut in due to hurricane damage stood at 453,092 bpd; shut-in natural gas production totalled 1.735 bn cfpd, according to the Minerals Management Service, a division of the Department of Interior. Cumulative losses in the three weeks since Hurricane Ivan began affecting production has been 15.278 mm barrels of oil and 67.86 bn cf of gas.

The EIA also revised its gasoline price forecast for the fourth quarter upward by 11 cents a gallon to $ 1.89, noting a response to higher crude oil costs and a shift in gasoline inventories to the lower end of their normal range by end-September from the upper end of the range.
The agency reiterated its warning about the persistence of high transport fuel costs, writing "high current and projected crude oil costs suggest that large reductions in average gasoline prices are unlikely anytime soon."