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EIA revises fuel price forecast downward

Diesel is projected to average $3.90 a gallon for the rest of this year and to average even less, $3.87 a gallon, for 2013. Diesel prices averaged $3.84 a gallon last year.

The Trucker Staff

6/14/2012

The saying goes that what goes up must come back down and it’s proving true for diesel and gas prices, at least for the short term.

Because of the volatility of crude prices and their downward slide of late, the Energy Information Administration (EIA), has revised its diesel and gas prices for the second half of this year in its June Short-Term Energy Outlook.

Diesel is projected to average $3.90 a gallon for the rest of this year and to average even less, $3.87 a gallon, for 2013. Diesel prices averaged $3.84 a gallon last year.

Gas price averages for the April-September summer driving season were revised to $3.60 a gallon, down from $3.79 a gallon in EIA’s “Outlook” for last month.

The revisions reflect concerns about world economy woes, oil demand growth, increases in U.S. oil production and the assumption that real gross domestic product (GDP) will grow 2.2 percent this year and 2.4 percent in 2013.

West Texas Intermediate (WTI) crude oil spot prices averaged more than $100 per barrel over the first four months of 2012, but the WTI spot price fell from $106 per barrel on May 1 to $85 per barrel June 7, “reflecting market concerns about world economic and oil demand growth,” EIA said. As a result, EIA now is forecasting WTI to average arund $95 per barrel for the rest of this year.

The agency also noted that lower economic growth in the U.S. and China, the world's top two oil users, “would likely put downward pressure on global oil demand and prices.“

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On the other hand, EIA says it expects U.S. total crude oil production to average 6.3 million barrels per day this year, an increase of 0.6 million barrels a day over last year and the highest level of production since 1997. Projected U.S. domestic crude product is forecast at 6.7 million barrels a day in 2013.

This month holds a number of key developments that might impact oil prices, including an OPEC ministers' meeting today, elections in economically struggling Greece on June 17, an impending European Union embargo and sanctions targeting Iranian crude exports.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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