DOE Predicts 2012 Will See Highest Oil Prices Since '08

The U.S. Energy Information Administration expects the price of West Texas Intermediate crude oil to average about $100 per barrel in 2012, almost $6 per barrel higher than the average price last year.

The forecast, released this week in EIA's Short-Term Energy Outlook, means the price of WTI would be the most expensive since 2008, when the price reached $99.57 a barrel. For 2013, the EIA, which is part of the U.S. Department of Energy, expects WTI prices to continue to rise, reaching $106 per barrel in the fourth quarter.

For on-highway diesel fuel retail prices, which averaged $3.84 per gallon in 2011, EIA expects an average of $3.91 per gallon in 2012 and $3.99 per gallon the following year. Regular‐grade motor gasoline retail prices are expected to average $3.55 per gallon in 2012, compared with $3.53 cents per gallon last year, and $3.59 per gallon in 2013.

Natural gas working inventories continue to set new record seasonal highs and ended January 2012 at an estimated 2.86 trillion cubic feet, about 24% higher than last year. EIA's average 2012 Henry Hub natural gas spot price forecast is $3.35 per million British thermal units (MMBtu), a decline of about $0.65 per MMBtu from the 2011 average spot price. However, EIA expects that Henry Hub spot prices will average $4.07 per MMBtu in 2013.