Short-Term Energy Outlook

The May 8 Short-Term Energy Outlook, by the EIA, had some points that help explain the high prices of gasoline, the major point being that gasoline inventories are down now and it will take until the end of summer for inventories to catch-up creating a situation where supply is very tight causing high prices.

• Continuing problems for refineries in the United States and abroad, combined with strong global gasoline demand, have raised our projected average summer gasoline price by 14 cents per gallon from our last Outlook. Retail regular grade motor gasoline prices are now projected to average $2.95 per gallon this summer compared with the $2.84 per gallon average of last summer. During the summer season, the average monthly gasoline pump price is projected to peak at $3.01 per gallon in May and again in August, compared with $2.98 per gallon last July. ...
• World oil markets are projected to tighten this summer due to continued growth in oil demand and production restraint by members of the Organization of Petroleum Exporting Countries (OPEC). Despite the recent increases in world oil prices, global oil consumption is projected to grow by 1.4 million barrels per day (bbl/d) in 2007 and by 1.6 million bbl/d in 2008. About one-half of the projected growth will come from China and the United States ....
• For 2007, U.S. crude oil production is projected to average 5.15 million bbl/d ... With the startup of new deepwater production from the Atlantis platform later this year and from the Thunderhorse platform late next year total domestic crude oil production is projected to average 5.34 million bbl/d in 2008.