posted on Mar, 12 2004 @ 01:49 PM
The Energy Information Administration (EIA) predicts average gasoline
prices will continue to rise past last August’s record of $1.74 per gallon to over $1.83 per gallon this spring. Higher crude oil prices due to world
demand, and lower than average gasoline stocks are pushing gallon prices closer to the $2 mark. West coast states and Hawaii are already seeing prices
over $2 a gallon.
Energy Information Administration
For those people who want to peer into the future to try and ascertain an answer, EIA has just released its latest Short-Term Energy Outlook. This
monthly forecast, which was released yesterday (March 10, 2004), forecasts a monthly average peak price of $1.83 in April (and $1.82 in May), which
implies that we could see weekly prices even higher.
The price of a barrel of crude oil has risen steadily this year due to increasing demand. Thursday (March 11, 2004), the International Energy
Association (IEA) raised their projections for oil demand growth by 220, 000 barrels a day (b/d) to 1.65 million b/d for the year 2004. This is mainly
due to China’s surging demand for more energy as the nation develops into a more modern country. While demand has risen, OPEC is staying firm on its
decision to cut oil production by 1 million b/d in April.
Low oil stocks and high demand, due to a recovering economy, are keeping the price at the pump in a steady climb. Gasoline stocks are at their lowest
level since the 70’s. So even if refineries had the extra capacity to increase supply, the reserve levels would be too low to sustain increased
production. Since the situation has gained so much public attention, the Senate has passed an amendment to the 2005 budget to cancel delivery of 53
million barrels of crude oil, which was to be used to refill the Strategic Petroleum Reserves. Diverting the crude oil deliveries to the public market
could help lower the price at the pump slightly, but it is unclear if Congress will pass the Senate’s amendment .
International Energy Association
" target="_blank" class="postlink" rel="nofollow">MSNBC
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[Edited on 25-3-2004 by dbates]