EIA notes boycott effort; sees summer average of $2.95 per gallon

On May 15, some consumers heeded a call spread through the Internet to not buy gas that day, the Energy Information Administration noted in the May 16 edition of “This Week in Petroleum.” mp2

However, if such consumers simply shift their gasoline purchases to a different day, while continuing to use the same amount of fuel, no reduction in actual consumption of gasoline will have occurred, the EIA pointed out in its weekly publication. While EIA “neither formulates nor advocates any policy conclusions,” if prices are high due to supply and demand factors, and consumers cannot directly increase supply, reducing demand is left as the main option for consumers, the weekly publication noted.

Gasoline inventories are expected to remain lower than normal throughout the summer, even though high prices have encouraged more supply and inventories have increased slightly in the last two weeks, according to the EIA. Domestic gasoline production has increased by more than 500,000 barrels per day in the last three weeks and total gasoline imports (including blending components), during the week ending May 11, rose above 1.5 million barrels per day, making that week the fifth highest weekly import volume ever and the highest since last May. Should imports continue at such levels and more domestic refinery capacity come back online, supplies will improve and wholesale prices could come down, the EIA said. However, with gasoline inventories likely to remain low all summer, retail prices are expected to remain close to $3 per gallon during the entire summer season, according to the EIA.

Prices could rise again toward the end of summer if demand surges, as it often does, in late July and August. However, absent any major petroleum infrastructure problems or overseas disruption in supplies, the average national retail price for regular gasoline is not expected to rise much beyond its present range, although a significant spread in regional price is likely to persist.

In its Short-Term Energy Outlook of May 8, the EIA increased its projected average summer gasoline price by 14 cents per gallon, compared to a projection made in the previous Short-Term Energy Outlook. The EIA cited continuing problems for refineries in the United States and abroad, combined with strong global gasoline demand, as reasons for changing its projection.

The average price of gasoline for the summer driving season (April – September) is now projected to be $2.95 per gallon.

The average monthly gasoline pump price is projected to peak at $3.01 per gallon in May and again in August, compared with $2.98 per gallon last July.

Meanwhile, for the third consecutive week, gasoline prices were up, increasing 4.9 cents to 310.3 cents per gallon as of May 14, 2007, according to “This Week.” Prices are 15.6 cents per gallon higher than this time last year and have now reached an all-time nominal high. All regions reported price increases. East Coast prices were up 2.3 cents to 298.1 cents per gallon. In the Midwest, prices jumped 9.8 cents to 317.2 cents per gallon, while prices for the Gulf Coast rose 4.5 cents to 291.5 cents per gallon. The largest increase was in the Rocky Mountains, where prices increased 10.3 cents to 319.3 cents per gallon. West Coast prices were up 0.5 cent to 337.8 cents per gallon. The average price for regular grade in California was down 1.1 cents to 345.0 cents per gallon, but remains 12.0 cents per gallon above last year's price.

Retail diesel prices fell for the fourth consecutive week, decreasing 1.9 cents to 277.3 cents per gallon. Prices are 14.7 cents per gallon lower than at this time last year. East Coast prices fell 2.3 cents to 275.8 cents per gallon. In the Midwest, prices were down 1.4 cents to 274.0 cents per gallon, while the Gulf Coast saw a decrease of 3.1 cents to 271.3 cents per gallon. The only region to see an increase in price was the Rocky Mountains, where prices were up 0.3 cent to 299.8 cents per gallon. Prices on the West Coast saw a decrease of 1.6 cents to 291.9 cents per gallon, while California prices fell 2.2 cents to 295.2 cents per gallon, 29.0 cents per gallon lower than at this time last year.