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July 11, 2007 10:00 AM, EDT

Diesel Price to Rise, DOE Says

Fuel Outlook Cites High Demand, Low Inventories
Frank Polich/Bloomberg News

National average diesel prices are expected to climb for the next three months before receding slightly toward the end of the year, according to projections by the Department of Energy.

And average summer-season retail regular motor gasoline price will average $3.02 a gallon, up 18 cents from last summer, DOE said in its monthly short-term energy outlook.

Diesel’s average monthly price will rise from June's $2.808 to $2.836 this month before climbing to peaks of $2.901 in August and $2904 in September.

The price will then fall back slightly in October to $2.881, to $2.858 in November and to $2.851 in December, the department said.

Gasoline will average $3 a gallon in July and $3.07 in August, due to a combination of rising crude oil prices, strong demand for gasoline and low gasoline inventories, DOE said.

The new gasoline price projections for July and August are 4 to 5 cents per gallon below those included in the June short-term outlook, DOE said.

Crude oil prices, which have been rising over the last 2 months, are expected to reach a peak monthly average price in August before starting to ease slightly, the outlook said.

Crude prices topped $73 a barrel in intraday trading Tuesday for the first time since late August, before receding to close at $72.81 a barrel on the New York Mercantile Exchange, Bloomberg reported.