DOE Projects Diesel to Average $2.50 in First Quarter ’06

Click here to write a Letter to the Editor.

he Department of Energy projects diesel fuel will average $2.50 a gallon in early 2006, down from its previous forecast of $2.58 a gallon.

Crude oil will average $62.42 per barrel, which is also below the November forecast of $64.00, DOE’s Energy Information Administration said in its monthly Short-Term Energy Outlook.

“Recent declines in petroleum product prices (especially gasoline and diesel) due to mild weather and ongoing hurricane recovery efforts have caused us to lower our petroleum price forecasts for the next few months,” EIA said.

The agency forecast crude oil and related product prices would remain high in 2006 due to tight international supplies as well as hurricane-related supply problems.

It projects diesel to average $2.51 a gallon in the second quarter, then fall to $2.49 in the third, only to jump back to $2.68 in the fourth quarter.