U.S. EIA Revises Gas Price Outlook, Projecting $3.56 per Gallon Average for Rest of 2012

WASHINGTON – The U.S. Energy Information Administration (EIA) adjusted its short-term outlook for retail gasoline prices downward for April through September. EIA said it expects retail gasoline prices to average $3.56 per gallon in 2012, and $3.51 per gallon in 2013 (based on current trends holding steady).

For oil prices, EIA said West Texas Intermediate crude oil spot prices averaged more than $100 per barrel during the first four months of the year. The spot price dropped $23 in a single month, from $106 per barrel on May 1 to $83 per barrel on June 1, in response to concerns about global economic growth and oil demand growth.

EIA said it projects the price of WTI crude oil to average $95 per barrel during the second half of 2012, and the average refiner acquisition cost to average $100 per barrel. Both figures are nearly $11 per barrel lower than the EIA’s projections last month, and EIA said oil prices will stay fairly flat in 2013. To make these projections, the EIA said it’s assuming GDP will grow by 2.2% for 2012 and 2.4% in 2013, and that world oil‐consumption‐weighted real GDP grows by 3.1% and 3.5% in 2012 and 2013, respectively. That said, EIA cautioned that it could adjust its projections further if economic growth forecasts are revised downward.

As for U.S. oil production, EIA said it will average 6.3 million barrels per day in 2012, which is an increase of 0.6 million barrels per day over 2011, and the highest level of production since 1998. In 2013, EIA projects domestic oil production will increase to 6.7 million barrels per day.