U.S. benchmark crude oil prices in 2013 are expected to be almost 5% lower than previously forecast amid a sluggish economy and domestic production that's headed for a two-decade high, the Energy Information Administration said in a report.
West Texas Intermediate spot market crude is projected to average $88.29 a barrel next year, down from $92.63 in an October forecast and down 6.6% from an estimated $94.51 this year, The EIA said in its monthly Short-Term Energy Outlook released November 6.
WTI crude prices are on track to decline for the second year in a row in 2013, based on EIA figures, reflecting static gasoline demand and a drilling boom in the shale regions of North Dakota and Texas. U.S. oil production is projected to average 6.85 million barrels a day next year, up 8.2% from 2012 and the highest since 1993.
The EIA held its 2013 estimate for Brent spot crude unchanged at $103.38 a barrel, down 7.4% from $111.61 in 2012. Brent crude's average premium to WTI is expected to narrow to about $11 a barrel by the end of 2013 from $22 last month.