WASHINGTON -- Gas prices for 2014 should remain slightly elevated above the 2013 average, according to the Energy Information Administration's (EIA) latest Short-Term Energy Outlook, which looks at the fuel-price forecast for the coming months.
For the 2014 summer driving season, which runs from April to September, EIA forecasts regular gasoline retail prices to average $3.66 per gallon, which is eight cents per gallon (CPG) higher than 2013. The agency expects prices to fall from an average of $3.68 per gallon in second-quarter 2014 to $3.64 per gallon during the third quarter.
EIA said it expects that the monthly average regular gasoline retail price to drop from $3.69 per gallon in June to $3.61 per gallon in September. The agency points to the Sept. 2014 New York Harbor reformulated blendstock for oxygenate blending (RBOB) futures contract, which averaged $3.01 per gallon for the five trading days ending July 2.
"Based on the market value of futures and options contracts for this key petroleum component of gasoline, there is a 4% probability that its price at expiration will exceed $3.35 per gallon," EIA reported, noting that this is consistent with a monthly average regular gasoline price above $4.00 per gallon in Sept. 2014.
EIA said it expects the U.S. annual average regular gasoline retail price to average $3.54 per gallon for 2014, a 4-CPG increase from its projection in last month's Short-Term Energy Outlook, after averaging $3.51 per gallon in 2013. The agency projects a $3.45-per-gallon national average for 2015, a 7-CPG increase from last month's projection.
For diesel, EIA has also updated its projected averages from last month's Short-Term Energy Outlook. It expects prices to average $3.93 per gallon in 2014 and $3.88 per gallon in 2015, an increase of 3 CPG and 10 CPG higher, respectively. Diesel prices averaged $3.92 per gallon in 2013.
On the demand side, gasoline consumption rose 1.1% in 2013, EIA reported, which was the greatest increase since 2006. The agency projects consumption to grow by 30,000 barrels per day (bpd) in 2014 but fall by 10,000 bpd in 2015 because of the increasing fuel economy of new vehicles offsetting more highway travel.
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