Knoxville, Tennessee (Platts)--15Aug2012/449 pm EDT/2049 GMT

Fitch Ratings lowered its 2012 and long-term Henry Hub natural gas price Wednesday while raising its oil price forecast for the year.

Fitch lowered its 2012 base case gas price to $2.75/Mcf from the prior estimate of $3.25/Mcf, reflecting weak pricing so far this year and prospects of continued oversupply in US markets.

"While recent heat-wave conditions have pushed electric generation usage up sharply this summer, this has been balanced against a very mild winter, which has led to average pricing of just $2.43/Mcf as of the end of July," the ratings agency wrote.

Fitch said it lowered its long-term Henry Hub gas price also by 50 cents to $4.50/Mcf from the previous long-term estimate of $5.00/Mcf.

The firm blamed "limited catalysts for higher US natural gas usage and the ongoing strength of shale-based liquids projects in North America, which has resulted in the treatment of associated gas as a by-product in a number of plays, allowing producers to tolerate lower all-in natural gas prices."

But Fitch raised its 2012 base case West Texas Intermediate oil price to $92.50/barrel from the prior $87.50/b to reflect near-term market factors, while maintaining its long-term price at $65/barrel.

The agency noted that its price deck tends to be conservative for modeling and rating purposes, and often is below current spot and future markets.

--Stephanie Seay, stephanie_seay@platts.com --Edited by Valarie Jackson, valarie_jackson@platts.com