Retail Gas Prices Expected to Decline in 2013

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Retail Gas Prices Expected to Decline in 2013

07/13/2012

WASHINGTON, D.C. -- The Energy Information Administration (EIA) expects retail gasoline prices to drop below the July average by 2013 due to depressed consumer demand and continuing declines in crude oil prices, reports Oilprice.com. Drivers are likely to see prices below the current average of $3.41 per gallon by next year, stated the U.S. Energy Department.

Prices increased toward an average of $4 per gallon by April of this year, prompting some lawmakers to discuss tapping into strategic petroleum reserves. Since then prices have dropped; in June, the EIA lowered its predicted average price to $3.60 for the summer driving season.

In its short-term monthly outlook for July, the EIA projects that world oil demand will peak for the year during the third quarter of 2012. Factors include the expected seasonal peak for the April-September driving season, a surge in electricity demand for Middle Eastern countries, and depressed consumer demand.

Oil consumption is expected to outpace production by approximately 700,000 barrels per day, but impact is expected to be less than last year, when third-quarter consumption ran ahead of oil supplies by 1.8 million barrels per day, according to the report.

The current average price for a gallon of regular fuel dropped approximately five percent from one year ago, when drivers paid an average of $3.60 per gallon.