US gas will stay below $3/gal this summer - EIA

02 April 2009 00:29  [Source: ICIS news]

HOUSTON (ICIS news)--The US Energy Information Administration (EIA) said on Wednesday that US gasoline prices will not likely reach $3/gal this summer, a level well below last summer's record of over $4/gal.

Citing surplus refining capacity combined with low fuel demand due to the economic downturn, the EIA also predicted that the national average rate this summer will be around $2/gal.

“With over 4m bbl/day of excess crude oil production capacity, any surge in demand on a recovering economy could be met by increased production, mainly from OPEC countries,” the EIA said in its weekly petroleum analysis.

Last week, the US average price for regular gasoline went up 8.4 cents week to week.

The national average was tabulated at $2.046 cents/gal, above $2.000/gal for the first time since 17 November 2008, the EIA said.

The rise above the $2/gal mark was still relief at US pumps, the EIA said, compared with last year at the same time when average national prices were higher by $1.244/gal.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy blog
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By: Steven McGinn
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