Gasoline Prices Headed to Record Highs, DOE Says
asoline prices could reach record highs within a month and remain well above $2 a gallon this summer, the Department of Energy said.
Increased demand for gasoline, both seasonal and year-over-year, is expected to increase average monthly prices to a record $2.15 per gallon by spring, the DOE’s Energy Information Administration said in its latest short-term energy outlook.
EIA said pump prices for regular gasoline would average about $2.10 a gallon during the 2005 driving season, from April through September. The trucking industry burns about 290 million gallons of gasoline a week.
Global oil demand will rise 2.5% this year and next, down from 3.4% in 2004, EIA said.
EIA also said Wednesday that crude oil inventories rose by 3.2 million barrels, gasoline supplies fell by 200,000 barrels and distillate stocks dropped by 1.8 million barrels.
While news reports said the gasoline and distillate inventory declines were greater than analysts’ projections, crude oil inventories have improved compared to the same time last year, EIA said.
Meanwhile light sweet crude oil hovered around $55 a barrel in intraday trading on the New York Mercantile Exchange Wednesday, up from Tuesday’s $54.59 closing price.
IA said OPEC has indicated it would reconsider market conditions and production levels when it meets on March 16, and said that its outlook assumes OPEC will not cut production, given current high oil prices and tight supplies.
