EIA: Energy Prices to Stay Low Through 2009, but Rise in 2010
January 14, 2009
A slow economy is bad in many, many ways, but it definitely has its advantages when it comes to energy prices. After suffering record-high gasoline and diesel fuel prices in the summer of 2008, motor fuel prices have fallen by 50% or more, reaching $1.69 per gallon for regular gasoline and $2.45 per gallon for diesel fuel in December 2008. According to the latest projections from DOE's Energy Information Administration (EIA), the slump in fuel prices is expected to continue through 2009, causing the annual average prices for gasoline and diesel fuel to average only $1.87 and $2.27 per gallon, respectively. Natural gas spot prices are also expected to drop from the 2008 average of $9.13 per thousand cubic feet to only $5.78 per thousand cubic feet in 2009. That's partly because oil prices will also be depressed, averaging $43.25 in 2009.
The EIA projection is based on a 2% decline in U.S. gross domestic product in 2009, followed by a 2% increase in 2010 as the economy recovers. The expected recovery in 2010 will drive oil prices back up to an average of $54.50 per barrel. That increase, in turn, will cause natural gas prices to average $6.63 per thousand cubic feet in 2010, while average retail prices for gasoline and diesel fuel will rise to $2.18 and $2.54 per gallon, respectively. See the EIA's "Short-Term Energy Outlook."