US Energy Dept Expects Avg. US Gas Price to Hit $3.75 By Summer 2011

The US Energy Information Administration (EIA) just released its updated short term outlook for gas prices.

EIA expects the retail price of regular-grade motor gasoline to average $3.56 per gallon in 2011, 77 cents per gallon higher than the 2010 average and about 40 cents above the projected price in the previous Outlook.  EIA projects gasoline prices to average about $3.70 per gallon during the peak driving season (April through September) with considerable regional and local variation.

This is an 18 cent increase from today’s current gas prices, which are already astronomically high. Yesterday (March 8, 2011) the national average for a gallon of regular was $3.52, according to AAA, Oil Price Information Service and Wright Express.

EIA also predicts that the projected monthly average regular gasoline price will peak at $3.75 per gallon in June. Other analysts are saying gas prices will raise another $.50 by this years’ peak driving season.

EIA expects continued tightening of world oil markets over the next two years, particularly in light of the recent events in North Africa and the Middle East, the world’s largest oil producing region.  The current situation in Libya increases oil market uncertainty because, according to various reports, much of the country’s 1.8-million bbl/d total liquids production has been shut in and it is unclear how long this situation will continue.  The market remains concerned that the unrest in the region could continue to spread.

About the EIA

The Energy Information Administration (EIA) is the statistical agency of the Department of Energy.  It provides policy-independent data, forecasts, and analyzes to promote sound policy making, efficient markets, and public understanding regarding energy, and its interaction with the economy and the environment.