WASHINGTON -- The U.S. Department of Energy has raised its price projections for crude oil slightly, while diesel price projects remain virtually unchanged from last month.
In its monthly Short-Term Energy Outlook released this week, The DOE's Energy Information Administration (EIA) projects that the West Texas Intermediate crude oil spot price, which ended July at more than $78 per barrel, will average $81 per barrel in the fourth quarter of 2010 and $84 per barrel in 2011, slightly above the forecasts in last month's Outlook, according to a report on TruckingInfo.com.
The agency predicts that on-highway diesel fuel retail prices, which averaged $2.46 per gallon in 2009, will average $2.97 per gallon in 2010 and $3.14 in 2011. Last month, the agency was predicting diesel would average $2.98 per gallon this year and $3.13 next year.
The outlook projects regular-grade gasoline retail prices will rise from an average $2.35 per gallon in 2009 to an average $2.77 per gallon in 2010 and $2.92 per gallon in 2011.
EIA predicts that total liquid fuels consumption will grow by 140,000 barrels per day (0.7%) in 2010 and 170,000 barrels per day (0.9%) in 2011 as all of the major petroleum products register consumption growth. This reverses the trend of falling consumption over the past four years.
EIA's view of the world oil market is largely unchanged from last month's outlook. EIA expects world oil prices will rise slowly as world oil demand increases because of projected global economic growth, slower growth in non-OPEC oil supply and continued production restraint by members of the Organization of the Petroleum Exporting Countries. A gradual reduction in global oil inventories expected over the forecast period also should lead to higher oil prices.
EIA expects total natural gas consumption will increase by 3.8% from 2009 levels to 64.9 billion cubic feet per day in 2010 and then remain flat in 2011.
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