DOE Predicts Diesel to Average $2.66 a Gallon in ’07

December 13, 2006 2:30 PM, EST

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iesel prices will continue rising with little respite through May and will average $2.66 a gallon in 2007, which is 3 cents higher than its last forecast a month ago, the Department of Energy said in its monthly short-term energy outlook.

Diesel’s only price dip will be in February, when it will tick down less than a penny to $2.654, DOE said. It will peak for the year at $2.742 in May, which is 2 cents higher than its previous prediction for that month, DOE said.

Crude oil, meanwhile, edged higher by 35 cents to $61.37 a barrel on the New York Mercantile Exchange Wednesday, a day in advance of Thursday’s OPEC meeting in Nigeria, Bloomberg reported.

The cartel’s ministers may maintain current production targets and postpone a decision on output cuts until a future meeting, Bloomberg reported.

Meanwhile, DOE’s weekly inventory figures released Wednesday showed a decline of 4.3 million barrels of oil last week, a bigger decline than analysts had expected, Bloomberg said.

Inventories of gasoline and distillates, which include diesel, saw modest declines less than analysts’ forecasts, Bloomberg reported.