This is an excerpt from EERE Network News, a weekly electronic newsletter.

July 20, 2005

EIA: Gasoline, Crude Oil to Stay at Record Highs Through 2006

With crude oil prices recently topping $60 per barrel, DOE's Energy Information Administration (EIA) now expects crude oil prices to average $59 per barrel for the third quarter of 2005, about $6 higher than projected a month ago and $15 per barrel above the cost this time last year. According to the EIA's "Short-Term Energy Outlook," released on July 12th, any imbalances in supply and demand (whether real or perceived) could easily cause light crude oil prices to average greater than $60 per barrel. The EIA report blames increasing demand and lagging production capacity for the high prices, and notes that the hurricane season may contribute to high prices if oil production is disrupted in the Gulf of Mexico.

As a result, gasoline prices at the pump for the summer driving season (April through September) are now expected to average $2.25 per gallon for regular unleaded gasoline. Diesel fuel prices are even higher, and the EIA projects the average price at the pump for diesel fuel to average $2.33 for the summer driving season. See the EIA's "Short-Term Energy Outlook."

According to the American Automobile Association (AAA), the average U.S. price for unleaded gasoline hit a record high on July 14th, at $2.321 per gallon. On July 17th, the average U.S. price for diesel fuel hit a record high of $2.462 per gallon. See the AAA's "Daily Fuel Gage Report," and for the latest crude oil prices, see the New York Mercantile Exchange Web site.