June 18, 2008—The average price for regular gasoline in the US is now greater than $4 per gallon and is projected to keep climbing until August, according to DOE’s Energy Information Administration (EIA). The EIA’s “Short-Term Energy Outlook ,” released June 10, expects regular gasoline prices to peak at $4.15 per gallon and to average $3.78 per gallon for the year.
Diesel fuel prices are projected to remain near the June 2 price of $4.71 per gallon over the next few months, with an average price of $4.32 per gallon for the year. Spot prices for natural gas are also up, at $11.65 per thousand cubic feet (Mcf), a rise of $1.16 per Mcf from the average spot price in April. The spot price is expected to average $11 per Mcf for the year.
With fuel prices up, electricity prices are also expected to increase by about 3.7% in 2008 and another 3.6% in 2009.
The main driver for all these prices, of course, is the cost of crude oil, which surged to a record $138 per barrel on June 6. With the combination of strong demand and tight supply expected to continue, the EIA now projects average crude oil prices of $122 per barrel in 2008 and $126 per barrel in 2009.
This represents a shift in thinking, because until now, the EIA has always forecasted a drop in crude oil prices in 2009. In fact, last month’s outlook projected average crude oil prices of $110 per barrel in 2008 and $103 per barrel in 2009. The difference is caused by lower expectations for increased oil supplies, as oil production from countries outside of the Organization of the Petroleum Exporting Countries (OPEC) is currently lower than last year, notes EIA.
