Clean Fuel Rules Mean No Relief for Oil Prices in 2006
NEW YORK – Oil prices, which reached record levels in 2005, could rise even higher in 2006 as the United States implements clean fuel rules and world energy demand remains strong, according to Reuters. In 2006, tougher U.S. sulfur requirements for gasoline and diesel could cut supplies as refiners shut plants to revamp units and foreign suppliers find other markets with less stringent regulations.
New regulations from the U.S. Environmental Protection Agency require refiners to reduce sulfur content in gasoline starting Jan. 1, while ultra low sulfur diesel requirements will begin to be phased in from June. A recent Reuters poll of analysts predicted U.S. oil futures will average $57.34 a barrel next year from around $57 a barrel in 2005. Despite expectations of tighter supply and high prices, experts say demand growth will remain resilient.