In its monthly Short-Term Energy Outlook, the DOE's Energy Information Administration reports that spot prices for crude oil and petroleum products have increased over the past month. The price of West Texas Intermediate crude oil is expected to average $67 per barrel for the second half of 2009, an increase of about $16 compared with the first half of the year.
Meanwhile, retail diesel prices, which jumped more than 14 cents a gallon last week, are expected to be higher the rest of this year and next. Diesel fuel retail prices, which averaged $3.80 per gallon in 2008, are projected to average $2.40 per gallon in 2009, up 14 cents from the previous Outlook. Diesel fuel retail prices are projected to average $2.67 per gallon in 2010, up 19 cents per gallon from the previous Outlook.
The EIA notes that oil prices rose for the third consecutive month in May, driven in part by expectations of a global economic recovery and future increases in oil consumption. In addition, a weaker dollar and increasing financial market activity are prompting higher prices for commodities, overshadowing weak oil supply and demand fundamentals. The weaker dollar may indicate that economic activity abroad, especially in Asia, is stronger than currently estimated, meaning more demand for petroleum products.