US gasoline prices to rise on demand - report

16 April 2008 23:44  [Source: ICIS news]

HOUSTON (ICIS news)--An increase in gasoline consumption for the summer driving season will likely drive retail prices higher even if crude oil prices decline, a US agency said on Wednesday.

The increase is likely despite the fact that present consumption levels are lower than what they were at this time last year, according to the Energy Information Administration’s (EIA) This Week in Petroleum report.

"The simple fact that more and more gasoline will be used over the next few months will probably be enough to cause retail gasoline prices to increase, even if crude oil prices begin declining," the report said.

The EIA has projected that light sweet crude oil prices would moderate to around $103-104/bbl in May and June, while retail gasoline would average $3.60/gal in those months.

"Of course, should crude oil prices not decline from current levels of over $110/bbl for West Texas Intermediate (WTI) crude oil, retail gasoline prices could end up peaking even higher," the EIA said.

The current national average of regular gasoline at the pump is $3.399/gal, according to the American Automobile Association (AAA).

The May NYMEX reformulated blendstock for oxygenate blending (RBOB) contracts settled at a record high of 293.90 cents/gal, up 5.80 cents from the previous record on Tuesday.

By: Brian Balboa
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