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    Thursday, May 09, 2024

    EIA reports lowest summer gas prices in six years

    Even though prices at the pump have increased with the climbing temperatures, the United States Energy Information Administration says the average price to fill up your gas tank is at its lowest point in years.

    The EIA, a government statistical agency, is predicting that the average retail price for a gallon of regular unleaded fuel between April and September of this year will be $2.67. This price would be 92 cents under the 2014 average, 99 cents under the 2013 average, and $1.16 under the 2012 average.

    This average would be the lowest price since 2009. Similar to the steady drop in prices between autumn of 2014 and the early months of 2015, there was a steep decline in gas prices from late 2008 to early 2009. This resulted in an April to September average price of $2.70.

    The EIA made this prediction in its Short Term Energy Outlook report for July. The prices are measured in "real dollars" to account for inflation.

    The average U.S. retail price for a gallon of gasoline was $2.80 in June, an increase of eight cents over the May average. However, this price was also a year-over-year decrease of 89 cents.

    While the EIA says the increasing prices between May and June are an indicator of higher demand in the United States and abroad, it forecasts that prices will fall gradually and average $2.49 a gallon for the second half of 2015. This is slightly higher than the EIA's prediction of $2.48 a gallon for the overall 2015 average in the United States.

    The EIA anticipates a gentle oscillation in prices over the next year. The average retail price for a gallon of gasoline is expected to fall from $2.73 in July to a low point of $2.27 in December, then rise gradually to a high of $2.72 in June and July of 2016 before falling again in the winter months.

    Diesel prices are predicted to increase slowly over the next year. The average retail price for a gallon of diesel fuel in July is $2.81, $1.07 cheaper than July of 2014. The EIA forecasts that the average diesel price will climb gradually to $3.11 in July of 2016 before dropping slightly in the winter.

    One significant factor in the lower prices is a drop in the price of North Sea Brent crude oil, which is predicted to see a 41 percent year-over-year decrease in cost. This type of oil was $61 a barrel in June, $3 cheaper than it was in May.

    Brent crude oil prices have averaged between $55 and $65 per barrel since January, when the price was down to $48 a barrel. The EIA is forecasting that Brent crude oil prices will average $60 a barrel in 2015 and increase to $67 a barrel in 2016.

    Travel in the United States has been increasing steadily year over year in measurements by the Federal Highway Administration, and the EIA expects this trend will continue during the summer. The report anticipates a 2.2 percent increase in travel, the largest year-over-year increase in 11 years, due to lower gas prices as well as an anticipated 2.1 percent increase in non-farm employment and 3.6 percent increase in disposable income.

    Higher rates of travels lead to increased demand on fuel, and the EIA expects fuel consumption to increase by 194,000 barrels a day this summer. This rate would mark a 2.1 percent increase over 2014.

    Production is expected to slightly outpace demand during the summer. The EIA says inventories of finished motor gasoline and gasoline blending components were 10.7 million barrels above the previous five-year average, and this supply is also projected to be 3.7 million barrels above the previous five-year average at the end of the summer.

    However, the EIA also estimates that crude oil production in the United States fell by 50,000 barrels a day between April and May. It predicts that production will continue to fall, going from an average of 9.5 million barrels a day in 2015 to 9.3 million barrels a day in 2016, before increasing again in early 2016.

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