Average crude oil prices are expected hit a high note to end the year, then fall in 2013, while U.S. oil production should hit its highest level in two decades, according to the October forecast by the U.S. Energy Information Administration (EIA).

Oil prices could rise slightly to $111 per barrel in the final quarter. Next year, they would drop off to an average $103, the agency said.

The agency predicts oil inventory increases in the first half of 2013 to reach higher levels than the same period this year ...