EIA Short Term Energy Outlook: Growth is Slowing, Fuel Will Go Up
September 7, 2011
The Energy Information Administration has significantly changed its predictions based on slower economic growth, and expects fuel prices to rise next year.
The EIA's economic growth assumptions for September have been lowered substantially compared with August's Outlook. This forecast assumes that U.S. real gross domestic product grows by 1.5% this year and 1.9% next year compared with 2.4% and 2.6%, respectively, in the previous Outlook.
Under the agency's assumptions, world oil-consumption-weighted real GDP grows by 3.1% and 3.8% in 2011 and 2012, respectively, compared with 3.4% and 4.1% in the last Outlook. With weaker economic growth and lower petroleum consumption growth, EIA expects the U.S. average refiner acquisition cost of crude oil to rise from an average of $100 per barrel in 2011 to $103 per barrel in 2012, compared with an increase to $107 per barrel in 2012 in last month's Outlook.
Nevertheless, the agency still expects diesel prices to rise. EIA expects that on-highway diesel fuel retail prices, which averaged $2.99 per gallon in 2010, will average $3.85 per gallon in 2011 and $3.87 per gallon in 2012. Projected U.S. refinery diesel fuel margins increase from an average of $0.38 per gallon in 2010 to $0.65 per gallon in 2011, then fall to an average of $0.58 per gallon in 2012.