EIA Reports

U.S. DEPARTMENT OF ENERGY
WASHINGTON DC 20585

FOR IMMEDIATE RELEASE
APRIL 10, 2007

Projected Summer Gasoline Prices Are Near Last Summer’s Level

Retail regular grade motor gasoline prices are projected to average $2.81 per gallon this summer, 3 cents below the average of $2.84 per gallon last summer, according to forecasts released today by the Energy Information Administration (EIA) in the April Short-Term Energy Outlook.  Retail diesel fuel prices are expected to average $2.82 per gallon over the summer, down 6 cents from last summer’s average price of $2.88 per gallon.
 
U.S. retail motor gasoline prices surged over the last 2 months, rising by more than 60 cents per gallon due to higher crude oil prices, unplanned refinery outages, increased demand for gasoline, and low levels of gasoline imports from Europe.  However, although gasoline prices began their seasonal increase about a month earlier than usual this year, the rapid rate of price increase is projected to slow over the next few months.  During the summer season the average monthly gasoline pump price is projected to peak at an average of $2.87 per gallon in May.  Last summer, the average monthly gasoline pump price peaked at $2.98 per gallon in July. 

Other highlights for the Short-Term Energy Outlook include:

• As a result of tight oil markets and continued international uncertainty, the price of West Texas Intermediate crude oil is expected to average over $65 per barrel this summer (compared with $70 per barrel last summer) and average close to $64 per barrel annually for both 2007 and 2008. 

• Despite the recent increases in world oil prices, global oil demand is projected to grow by 1.5 million barrels per day (bbl/d) in 2007 and 1.6 million bbl/d in 2008.  About one-half of the projected growth in world oil consumption is in China and the U.S. 

• Average U.S. crude oil production is expected to decrease by 30,000 bbl/d, or 0.6 percent, in 2007, to a level of 5.1 million bbl/d.  In 2008, a 4.3-percent increase is expected, resulting in an average production rate of 5.3 million bbl/d.  Much of the expected increase in domestic crude production comes from startup of the deepwater Gulf of Mexico Atlantis platform in late 2007 and the Thunderhorse platform in late 2008.

• Concerns about extreme weather conditions and rising prices in the oil market will keep upward pressure on the Henry Hub spot price during through 2008.  On an annual basis, the Henry Hub spot price is expected to average $7.83 per thousand cubic feet (mcf) in 2007, an 89-cent increase from the 2006 average, and $8.11 per mcf in 2008.
   
• Following large increases in residential electricity prices during 2006, prices are projected to grow at a slower rate of 3.0 percent during 2007.  Electricity prices are expected to continue to grow at 3.1 percent during 2008 as higher fuel costs are passed through to retail customers. 

Short-Term Energy Outlook is published monthly on EIA’s Internet Web site to meet the public’s demand for more timely energy data and forecasts.  Users can view and download the forecast analysis, tables and charts by going to the Outlook home page at http://www.eia.doe.gov/emeu/steo/pub/contents.html. 

EIA Program Contact: Tancred Lidderdale, 202/586-7321

EIA Press Contact: National Energy Information Center, 202/586-8800

EIA-2007-02

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