Gasoline and Oil Prices Fall as Driving Season Draws to a Close
September 13, 2006
As the summer driving season wraps up, a drop in demand for gasoline combined with a switch to winter-grade gasoline (which is cheaper to produce) is causing retail prices for gasoline to fall in the United States, according to DOE's Energy Information Administration (EIA). After reaching near-record levels at mid-summer, the average price for regular unleaded gasoline fell to $2.62 per gallon as of September 11th, as reported in the September 12th edition of "Short-Term Energy Outlook." The EIA report projects a continued decline in gasoline prices in the coming months, reaching a low of $2.55 per gallon in January 2007 before rising again to average $2.77 per gallon next summer.
The high prices for gasoline and petroleum have contributed to a slow growth in demand in the United States and throughout the world. U.S. gasoline consumption is expected to grow by 1.0 percent in 2006 and 1.2 percent in 2007, while U.S. petroleum consumption is expected to remain flat this year but increase 2.0 percent in 2007. Global petroleum consumption is expected to increase 1.4 percent in 2006 and 2.0 percent in 2007, with China causing most of the demand growth this year, and the United States joining China as the major sources of demand growth next year. For now, though, petroleum prices are dropping, with crude oil spot prices falling below $70 per barrel on September 1st, according to the EIA's "This Week in Petroleum." The EIA projects spot prices to remain around $70 per barrel through 2007. See the "Short-Term Energy Outlook" and "This Week in Petroleum" reports on the EIA Web site.
For the latest retail prices for gasoline and futures prices for petroleum, respectively, see the Daily Fuel Gauge Report, a service of the American Automobile Association, and the New York Mercantile Exchange Web site.