For 2012, the Energy Information Administration has lowered its forecasted price for diesel and gasoline, and it expects West Texas Intermediate crude oil to average about $95 per barrel over the second half of 2012.
On-highway diesel fuel retail prices, which averaged $3.84 per gallon in 2011, will average $3.90 per gallon in 2012, forecasts the DOE agency in its Short-Term Energy Outlook. The new forecast is down 16 cents per gallon from last month. In 2013, diesel fuel retail prices are projected to decline slightly to an average $3.87 per gallon.
As a result of higher crude oil costs, monthly average regular-grade gasoline prices peaked at $3.90 per gallon in April 2012 compared with an average of $3.53 per gallon in 2011. Due to the sharp decline in crude oil prices throughout May, EIA expects the regular gasoline retail prices during the summer season (April through September) to average $3.60 per gallon in 2012, compared with $3.79 per gallon in last month's Outlook. EIA expects regular gasoline retail prices to average $3.56 per gallon in 2012 and $3.51 per gallon in 2013.
West Texas Intermediate crude oil spot prices averaged more than $100 per barrel during the first four months of 2012. The WTI spot price then fell from $106 per barrel on May 1 to $83 per barrel on June 1, reflecting market concerns about world economic and oil demand growth. EIA projects the price of WTI crude oil to average about $95 per barrel over the second half of 2012 and expects crude oil prices to remain relatively flat in 2013.
This forecast rests on the assumption that U.S. real gross domestic product grows by 2.2% this year and 2.4% next year, while world oil-consumption-weighted real GDP grows by 3.1% and 3.5% in 2012 and 2013, respectively. The recent economic and financial news that points towards weaker economic outlooks could lead to lower economic growth forecasts and further downward revisions to EIA's crude oil price forecasts
Natural gas working inventories ended May 2012 at an estimated 2.9 trillion cubic feet, about 31% above the same time last year. EIA's average 2012 Henry Hub natural gas spot price forecast is $2.55 per million British thermal units, which is 10 cents per MMBtu higher than last month's Outlook. EIA expects that Henry Hub spot prices will average $3.23 per MMBtu in 2013.