Hold on, says the Department of Energy, that $4 diesel isn't going to last - but it's going to be higher than we originally predicted.
It its Short Term Energy Outlook, released March 11, the DOE's Energy Information Administration raised its projection for diesel prices, saying it will average $3.45 a gallon this year - 57 cents above last year's average - and $3.70 in March and April.
The annual average crude price for West Texas Intermediate Crude, which was $72 per barrel in 2007, is projected to average $94 this year, but ease to about $86 per barrel in 2009. Crude oil averaged $95 a barrel in February and will average $102 in March, DOE said.
Oil closed at a record $108.75 Tuesday, but DOE said it expects the price to fall later this month.
"The outlook over the next two years points to some easing of the oil market balance due to increased production outside of the Organization of the Petroleum Exporting Countries and planned additions to OPEC capacity," the report predicted. "However, delays to capacity additions in both OPEC and non-OPEC nations could alter the outlook, as could OPEC production decisions."