• Feb 1, 2011
According to the DOE's Energy Information Administration (EIA), crude oil prices are expected to steadily increase over the next two years, hitting $99 per barrel by the end of 2012. Tightening of world oil markets, along with a growth in consumption, will continue to drive oil prices up from the recorded average of $89 a barrel in December 2010 to an estimated $93 per barrel for 2011.
Higher crude oil prices directly translate into increases at the pump. The EIA projects that regular-grade gasoline will climb from the documented average of $2.78 per gallon in 2010 to $3.17 in 2011 and hit $3.29 per gallon by the end of 2012. Likewise, the cost of diesel fuel is estimated to soar from the recorded $2.99 per gallon in 2010 to $3.52 in 2012. Adding to the pain at the pump, the EIA predicts that there's at least a seven percent chance that the retail price of gasoline could, once again, exceed the $4 mark at some point this July.

[Source: U.S. Department of Energy | Image: Kari_Marie – C.C. License 2.0]
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EIA: Oil Prices to Average $99 per Barrel by Late 2012

Crude oil prices are projected to steadily increase over the next two years and will average $99 per barrel in the fourth quarter of 2012, according to DOE's Energy Information Administration (EIA). The EIA's "Short-Term Energy Outlook," released on January 11, projects a continued tightening of world oil markets over the next two years, with consumption growing by an annual average of 1.5 million barrels per day. At the same time growth in supply from countries that are not members of the Organization of Petroleum Exporting Countries (OPEC) will average less than 0.1 million barrels per day each year. The EIA expects oil markets to rely on OPEC production increases and to draw down inventories to fill the demand gap. As a result, crude oil is expected to average $93 per barrel in 2011 and $98 per barrel in 2012, although these figures depend heavily on the rate of economic growth and on the magnitude of OPEC production increases. Crude oil spot prices averaged more than $89 per barrel in December 2010, about $5 per barrel higher than the November average.

In the United States, the primary impact of increasing crude oil prices will be on the price of motor fuels. The EIA expects retail prices for regular-grade gasoline to rise from an average of $2.78 per gallon in 2010 to $3.17 per gallon in 2011 and $3.29 per gallon in 2012. Likewise, retail prices for on-highway diesel fuel will rise from $2.99 per gallon in 2010 to $3.40 per gallon in 2011 and $3.52 per gallon in 2012. But because of increased demand, summer prices tend to rise above the average, so the EIA is anticipating that this year's peak monthly average price for gasoline will be reached in July, when it is projected to crest at $3.27 per gallon. However, the EIA estimates a 7 in 2011. In 2012, projected economic growth will cause a 2.4% increase in energy-related carbon dioxide emissions. See the EIA's "Short-Term Energy Outlook."

The International Energy Agency (IEA) confirms in its latest Oil Market Report that oil markets are indeed following the trends noted by the EIA, namely, that higher oil demand is being met with a drawdown of inventories and greater production from OPEC countries. The IEA notes that OPEC oil production increased by 250,000 barrels per day in December 2010, reaching 29.58 million barrels per day, while inventories in developed countries (those belonging to the Organisation for Economic Co-operation and Development, or OECD) dropped by 8.3 million barrels in November 2010, reaching 2,742 million barrels. See the highlights from the report on the IEA's Oil Market Report Web site.


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  • 58 Comments
      • 3 Years Ago
      i remember a few years back when hawaii had ~$4.80 for premium. not happy to see those days back :p

      just for kicks i paid 3.69 at costco yesterday for premium.

      yay hawaii!
      • 3 Years Ago
      Meh, I'm over 7$ a gallon... Europe sucks sometimes.
      • 3 Years Ago
      And this will do more to get people to buy fuel efficient cars than CAFE ever did.
        • 3 Years Ago
        Briefly.. and when prices retreat, back to the SUV's they'll go. Just like last time.
        • 3 Years Ago
        I don't know, after hearing a coworker state that it cost him $100 a week in gas to use his Tahoe during the last gas hike, that may not be true. He was able to buy a used Elantra and gas it up for no more than gas would have cost him for a year, and he had a more fuel efficient car to fall back on in the end.
        • 3 Years Ago
        Its been 5 years since hurricane katrina caused a fuel price spike. If you haven't changed your fueling requirements since.. you sort of deserve to pay more.
        • 3 Years Ago
        If they can afford them. And I'm not defending CAFE here, but it will also hit the poor and middle class right in the wallet, not only as the direct cost of fueling their vehicles goes up, but as all the prices of goods and services that rely on fuel go up as well. Not a good trade off when compared to having a coherent energy strategy that addresses the present as well as transitions to the future. But I'm sure some will be doing back flips that a few extra Fiat 500s or Fiestas moved off the lot. Pretty "meh" IMO. :
      • 3 Years Ago
      umm, it's already $3.69 in my town for 93 octane and it has been that way for several months.
      • 3 Years Ago
      Its time to revolt. I paid $3.68 a gallon for premium on Saturday, and thats 50 miles west of Chicago, out where its supposedly "cheaper". The bigger bummer is that my car requires premium. Im screwed.
      • 3 Years Ago
      brent crude hit $98 a barrel last friday.
      • 3 Years Ago
      At least this time round the domestics have nice small cars.
        • 3 Years Ago
        I know, right.

        Small cars haven't been this appealing since the 90's. It's good times.
      • 3 Years Ago
      Meh...

      Could be worse, I guess. Least maybe this will get MMS and BOEMRE to pull their collective head out of the sand.
      • 3 Years Ago
      $3.29? Does the entire east coast just pay 30% for gas than the rest of the country?
        • 3 Years Ago
        Not all, but it is one of the 'high price' areas. Chicago is another, and LA is rather high usually. Much of the blame is given to pollution mandates, but there is more to it than that.
        • 3 Years Ago
        Not New Jersey. And they pump it for you!
      • 3 Years Ago
      This isn't terrible news to me. I think the market really only responds to gas prices after they get over 4 bucks a gallon. At that point, people actually start to drive less and place more emphasis on smart infrastructure and greener auto technology.

      The last gasoline spike drive a lot of investment into the EV and hybrid models that seem to be getting announced daily recently. I want to see more of that not only for environmental reasons but also to save gasoline for cars that actually deserve to burn old fashioned petrol.

      It makes me sad driving my beloved Subaru every day using up all that great gas and those good tires just to get to work. I want an EV I don't care about to do that and save my gas and tires for the track and for the Blue Ridge Parkway.

      Bring on the $4 gas, I want my used Focus EV for 5 grand by 2015 ya hear!

      • 3 Years Ago

      Gee, I wonder how short the pump figures are? duh.

      So what happens when they reach $4.00 per? What happens to all the Ford and GM profits? For example, aren't 45% percent of Ford sales made up of full-sized pick-ups? Isn't GM close to that too?

      What happened when the prices went skyward last time?
      • 3 Years Ago
      I've been paying $3.39/gal or more for a couple of months now. I'd like to see more reporting on the most expensive places to buy gas so people get pissed.
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