EIA Projects $3.86 Average Summer Gas Price
WASHINGTON - On April 12, the U.S. Energy Information Administration (EIA) released its April 2011 Short-Term Energy and Summer Fuels Outlook, which includes a detailed look at the costs and inventories of transportation fuels during the months of April through September.
The EIA reported regular-grade gasoline retail prices, which averaged $2.76 per gallon last summer, are projected to average $3.86 per gallon during the 2011 driving season. EIA expects the monthly average gasoline price to peak at about $3.91 per gallon by mid-summer.
Diesel fuel prices, which averaged $2.98 per gallon last summer, are projected to average $4.09 per gallon this summer, according to EIA. Weekly and daily national average prices can differ significantly from monthly and seasonal averages, and there are also significant differences across regions, with monthly average prices in some areas exceeding the national average price by 25 cents per gallon or more.
The EIA said that due to taxes and retail distribution costs being more stable than fuel prices, gasoline and diesel price changes are driven by changes to crude oil prices and wholesale margins. The retail price projections in the Outlook reflect higher acquisition costs for crude oil. The EIA projects crude oil costs of $112 per barrel, which makes up $2.67 of retail fuel prices on a per-gallon basis, compared with an average of only $75 per barrel last summer, only $1.78 per gallon.
EIA said it expects wholesale gasoline margins to average 53 cents per gallon during the summer, up 18 cents per gallon from last summer. Diesel margin forecasts are 60 cents per gallon, 20 cents higher than last summer’s margin (only 40 cents per gallon).
EIA projects gasoline consumption will average about 9.3 million barrels per day (bbl/d) over the summer, an increase of 45,000 bbl/d (0.5 percent) over last summer. Population growth and a recovering economy contribute to gasoline consumption growth, while higher gasoline prices and the increase in the Corporate Average Fuel Economy (CAFE) tend to moderate it.
At the onset of the summer driving season, total motor gasoline stocks, at an estimated 215.7 million barrels, are 8 million barrels below the level of a year ago, but 1 million barrels above the most recent 5-year average (2006-2010).
For the five trading days ending on April 7, 2011, market prices of futures and options contracts for gasoline suggest a 33-percent probability that the national monthly average retail price for regular gasoline could exceed $4.00 per gallon during summer 2011, according to EIA.
EIA stated the price forecast for transportation fuels is highly uncertain, due partly to the uncertainty in the Outlook for crude oil prices.