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Pump prices expected to head higher
By H. Josef Hebert, Associated Press Writer
Wednesday, March 09, 2005 | No comments posted.
WASHINGTON - Gasoline prices probably will jump an additional 15 cents this spring and remain well above $2 a gallon through the heavy driving season, forecasters say.
There's also little relief in sight for crude oil prices, which are pushing gasoline costs higher. Crude prices probably will remain "near the high to mid-$40" a barrel range well into 2006, the Energy Department's Energy Information Administration said Tuesday.
Regular gasoline averaged $2 a gallon last week, 26 cents higher than a year ago, and crude prices have been above $50 a barrel, briefly surpassing $55 a barrel last week.
While the EIA expects prices to ease off from the currently high levels, it noted that oil prices are highly sensitive to market pressures and "imbalances, real or perceived, ... could cause light crude oil prices to increase well above $50 per barrel as has recently occurred."
Some analysts have suggested crude could surpass $60 a barrel in the coming weeks and stay high for some time because of growing global demand and the limited ability of producers to easily expand production.
The report said motorists are likely to see increasing pump prices in 2005, with regular gasoline expected to average about $2.10 a gallon nationwide during the heavy driving season from April through September. That's one-fifth higher than last year.
Prices are likely to average about $2.15 a gallon by spring and early summer, despite adequate fuel inventories.
Many consumers will face the higher gasoline costs even as they may still be trying to pay off winter heating bills. A relatively mild winter has tempered the demand for heating oil, natural gas and propane.
But the EIA said the high cost of fuel has forced average heating bills 10 percent (for natural gas) to 29 percent (for heating oil) higher than last winter. Propane users have seen a 17 percent jump in heating costs.
The EIA report said tight supply of oil worldwide is putting upward pressure on energy prices, although members of the Organization of Petroleum Exporting Countries increased production by 630,000 barrels a day in February.
OPEC representatives are scheduled to meet March 16 to discuss future production levels. The EIA said its report "assumes OPEC will not cut production ... given high oil prices and tight supply."
Crude oil from non-OPEC countries is expected to increase by an average of 1.2 million barrels a day over the next 15 months, the EIA said. Global oil production is more than 80 million barrels a day, about 35 percent coming from OPEC members. Demand is expected to approach 84 million barrels a day in 2005, according to some analysts.
OPEC countries are limited in how much more oil they can pump. With February's production increases, OPEC's spare capacity was reduced to 1.1 million barrels a day, all of it believed to be in Saudi Arabia and the United Arab Emirates. Iraq continued to produce 1.9 million barrels a day in February, despite sporadic sabotage of oil pipelines, according to the EIA.
---
On the Net:
Energy Information Administration: http://www.eia.doe.gov
There's also little relief in sight for crude oil prices, which are pushing gasoline costs higher. Crude prices probably will remain "near the high to mid-$40" a barrel range well into 2006, the Energy Department's Energy Information Administration said Tuesday.
Regular gasoline averaged $2 a gallon last week, 26 cents higher than a year ago, and crude prices have been above $50 a barrel, briefly surpassing $55 a barrel last week.
While the EIA expects prices to ease off from the currently high levels, it noted that oil prices are highly sensitive to market pressures and "imbalances, real or perceived, ... could cause light crude oil prices to increase well above $50 per barrel as has recently occurred."
Some analysts have suggested crude could surpass $60 a barrel in the coming weeks and stay high for some time because of growing global demand and the limited ability of producers to easily expand production.
The report said motorists are likely to see increasing pump prices in 2005, with regular gasoline expected to average about $2.10 a gallon nationwide during the heavy driving season from April through September. That's one-fifth higher than last year.
Prices are likely to average about $2.15 a gallon by spring and early summer, despite adequate fuel inventories.
Many consumers will face the higher gasoline costs even as they may still be trying to pay off winter heating bills. A relatively mild winter has tempered the demand for heating oil, natural gas and propane.
But the EIA said the high cost of fuel has forced average heating bills 10 percent (for natural gas) to 29 percent (for heating oil) higher than last winter. Propane users have seen a 17 percent jump in heating costs.
The EIA report said tight supply of oil worldwide is putting upward pressure on energy prices, although members of the Organization of Petroleum Exporting Countries increased production by 630,000 barrels a day in February.
OPEC representatives are scheduled to meet March 16 to discuss future production levels. The EIA said its report "assumes OPEC will not cut production ... given high oil prices and tight supply."
Crude oil from non-OPEC countries is expected to increase by an average of 1.2 million barrels a day over the next 15 months, the EIA said. Global oil production is more than 80 million barrels a day, about 35 percent coming from OPEC members. Demand is expected to approach 84 million barrels a day in 2005, according to some analysts.
OPEC countries are limited in how much more oil they can pump. With February's production increases, OPEC's spare capacity was reduced to 1.1 million barrels a day, all of it believed to be in Saudi Arabia and the United Arab Emirates. Iraq continued to produce 1.9 million barrels a day in February, despite sporadic sabotage of oil pipelines, according to the EIA.
---
On the Net:
Energy Information Administration: http://www.eia.doe.gov
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