Energy Department still sees $3-plus gasoline coming
3/9/2010NEW YORK — The Energy Department hasn't changed its mind about higher gasoline prices. It still expects pump prices to climb past $3 per gallon as more motorists hit the road in the spring and summer driving seasons.
In its monthly short-term energy outlook report, the Energy Information Administration said that for the full year the national average should be about $2.84 per gallon, up from $2.35 per gallon in 2009. That outlook was unchanged from last month.
Pump prices are already above $3 in California and are almost there elsewhere on the West Coast. The rest of the country isn't far behind. Higher oil prices, gasoline blended with ingredients to cut down on smog in warmer weather and an uptick in demand are expected to drive prices higher. Some analysts don't think U.S. consumers can afford to drive more or pay higher prices.
“The most important element is the unemployment rate remains high,” said Tradition Energy analyst Addison Armstrong. “People who don't have jobs don't drive to work every day. That takes away a lot of base load demand.”
According to the EIA, U.S. motorists consumed 8.99 million barrels per day of gasoline in 2009. The report predicts that to rise to 9.04 million barrels in 2010 and 9.11 million barrels in 2011.
With a more optimistic view of global economic growth, the EIA boosted its 2010 forecast for oil consumption growth to 1.5 million barrels per day from 1.2 million barrels per day last month. EIA expects most of the world's economic growth will come from the Asia-Pacific region and the Middle East.
Oil prices should average above $80 per barrel this spring, the report said. That's expected to rise to about $82 per barrel by the end of the year, and to $85 per barrel by the end of 2011.
Good news for homeowners: EIA's outlook for residential electricity prices stayed about the same from last month, at an annual average of 11.5 cents per kilowatthour for this year, rising to 11.6 cents per kilowatthour in 2011.
Heating costs next winter could be higher than this past winter. EIA sees the average natural gas price at $5.17 per million BTU, up from $3.95 per million BTU this year.
/AP-CS-03-09-10 1618EST