DOE: Diesel to Average Near $3 for 2010

The Department of Energy predicts diesel prices will average near $3 for the year and will be higher next year, while crude oil prices are expected to be slightly higher this winter than last.

In its Short-Term Energy and Winter Fuels Outlook released Wednesday, the DOE's Energy Information Administration predicted that on-highway diesel fuel retail prices, which averaged $2.46 per gallon in 2009, will average $2.96 per gallon in 2010 and $3.14 in 2011.

The agency projected regular-grade gasoline retail prices rise from an average $2.35 per gallon in 2009 to an average $2.74 per gallon in 2010 and $2.92 per gallon in 2011. On

EIA expects the price of West Texas Intermediate crude oil to average about $80 per barrel this winter, a $2.50-per-barrel increase over last winter. The forecast for average WTI prices rises gradually to $85 per barrel by the fourth quarter of 2011 as U.S. and global economic conditions improve.

EIA's forecast assumes U.S. gross domestic product (GDP) grows by 2.6 percent in 2010 and 2.1 percent in 2011, while world oil-consumption-weighted GDP grows by 3.8 percent and 3.3 percent, respectively, in 2010 and 2011.

Heating oil demand can affect diesel prices. ad the Northeast, the principal market for heating oil, is projected to be about 5 percent colder than last winter, according to the National Oceanic and Atmospheric Administration's most recent projection of heating degree-days.