Washington – Drivers can expect that retail gasoline prices will continue to average above $2.10 per gallon on a monthly basis through 2006, while diesel fuel prices are expected to average above $2.20 every month between now and the end of 2006, according to the Energy Information Administration.
The agency, part of the Energy Department, said Wednesday that the forecast is based on the average price of crude oil not falling below $55 per barrel through the end of next year.
Meanwhile, oil prices zoomed higher Wednesday, touching a new intraday high of $65 a barrel, with buyers focused on refinery snags, shrinking U.S. inventories of gasoline and motorists’ growing thirst for fuel despite record-high costs.
The latest rally – crude futures have risen 14 percent in three weeks – highlights just how nervous the market has become to output threats. It doesn’t seem to matter, analysts said, that the country has enough fuel in inventory to offset routine supply disruptions.
The heightened sensitivity comes amid strong demand in the United States and China, the world’s top consuming nations, where high prices have tempered rising fuel consumption only slightly.
“People talked about $60 crude slowing economies around the world. But here in the U.S., (Federal Reserve Chairman) Alan Greenspan is telling us the economy is doing great and getting stronger,” said James Cordier, president of Liberty Trading Group in Tampa, Fla. “It bodes well for crude testing the $70 range.”
Even so, Cordier said he has been stunned by the recent runup in oil and gasoline prices and the apparent lack of any response from motorists. Demand picked up by 1.4 percent from a year ago, according to government data.
Light, sweet crude for September delivery climbed as high as $65 a barrel on the New York Mercantile Exchange. The contract settled $1.83 higher at $64.90 a barrel, the highest level since Nymex trading began in 1983.
The average U.S. pump price for gasoline rose 2.2 cents to a record $2.376 a gallon Tuesday, according to the AAA. Prices are up 27 percent from a year earlier.
Colorado’s average price Tuesday was $2.32, which tied for 34th highest with Vermont, New Jersey and Kansas.
Gasoline consumption was up 1.4 percent for the four weeks that ended Friday compared with the same period a year earlier, the Energy Department said Wednesday.
Motor-fuel supplies fell 2.1 million barrels to 203.1 million barrels last week.
Who pays most
Colorado is tied for 34th in the nation, with an average per-gallon price of $2.32 for unleaded regular gasoline. The leaders:
1. California $2.68
2. Hawaii $2.67
3. Nevada $2.59
4. Washington $2.58
5. Oregon $2.53
6. New York $2.49
7. Alaska $2.48
8. District of Columbia $2.47
(tie) Arizona $2.47
Source: AAA
