WASHINGTON - Crude oil prices averaged $59 per barrel in July, and the U.S. Department of Energy's (DOE's) Energy Information Administration (EIA) now expects oil prices to average more than $59 per barrel for the entire third quarter, pushing up other fuel costs.

The EIA's latest Short-Term Energy Outlook anticipates oil prices exceeding $56 per barrel for the remainder of 2005 and throughout 2006, as worldwide spare production capacity is at its lowest level in three decades. The EIA projects that gasoline and diesel fuel prices will show increases of about 35 cents and 55 cents, respectively, for the 2005 driving season (April-September) relative to 2004 levels. These changes would result in increases in motor fuel prices for the third year in a row.

With heating oil prices going up, the EIA projects heating oil prices to be 16 percent higher this winter. Natural gas prices are also rising. The EIA expects spot prices for natural gas to average $8.50 per million cubic feet (mcf) in the fourth quarter, up from $7.86 per mcf in July, but prices are expected to moderate in 2006, averaging $7.34 per mcf.