Energy Department Lowers Outlook for Summer Gasoline Prices

The department estimates that U.S. retail gasoline prices could average $3.75 a gallon during the summer driving season.

June 08, 2011

WASHINGTON - Yesterday the Department of Energy??s U.S. Energy Information Administration (EIA) lowered its outlook for summer gasoline prices "amid a drop in crude oil prices and an increase in refinery output," reports Dow Jones Newswires.

EIA highlights in this month??s Short-Term Energy Outlook:

"Regular-grade retail gasoline price averaged about $3.96 per gallon during the first half of May as unexpected refinery outages and disruptions in distribution caused by the flooding of the Mississippi River and its tributaries temporarily counterbalanced the impact of lower crude oil prices. In recent weeks, gasoline prices have been falling, however, as the refinery situation has begun to recover. EIA expects the May average price of $3.91 per gallon will be the peak monthly average price this driving season. Still, EIA forecasts that the regular-grade motor gasoline retail price will average $3.75 per gallon during this summer's driving season (from April 1 through September 30), up from $2.76 per gallon last summer, but 6 cents per gallon lower than last month's Outlook."

EIA also reports that crude oil prices reached their highest level of this year at the end of April, fell by about 10 percent by May 9 and have changed very little since then. However, EIA still expects oil markets to tighten through 2012 given projected world oil demand growth and slowing growth in supply from countries that are not members of OPEC.

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