EIA: '08 WTI Crude to Average $122.15/Bbl

NEW YORK, June 10, 2008 (Dow Jones Newswires)

U.S. benchmark crude oil will on average cost $132 or more for the rest of the year, government forecasters said Tuesday.

The West Texas Intermediate spot crude price will peak for the year at $136 a barrel in November, according to the monthly Short-Term Energy Outlook, released by the Energy Information Administration.

The average annual price of $122.15 a barrel would represent a 69% increase over 2007, and a 12% appreciation from the EIA's May projection. July crude futures recently traded at $133.18 a barrel on the New York Mercantile Exchange, off from a record high of $139.12 set Friday.

The EIA continues to revise its forecast higher despite lowering its projections for U.S. demand. U.S. oil consumption is expected to decline by about 440,000 barrels a day this year "because of higher petroleum product prices and slower economic growth," as well as increased ethanol use, the EIA said.

The EIA is the independent statistics and analysis unit of the U.S. Department of Energy.

Benchmark light, sweet crude futures soared past the $122.15 a barrel average annual price forecast May 6, and haven't ended the day below that level since then.

"The combination of rising consumption, further downward revisions in the supply outlook...and low surplus production capacity reinforce the perception that supply is having a difficult time keeping up with demand growth, accounting for much of the upward trend in oil prices," the EIA wrote.

Regular gasoline will on average retail for $3.78 a gallon in 2008, a 7% increase from the May outlook and 35% higher than the $2.81 average price in 2007, according to the EIA. Gasoline is expected to cost $3.95 a gallon during the summer driving season, up from $2.94 a year earlier. The EIA calculates summer prices by averaging second and third-quarter prices. Gasoline prices are expected to peak at $4.15 a gallon in August, and will not average below $4 again this year. The nationwide average retail gasoline price topped $4 on Monday, according to the EIA.

Diesel prices will average $4.32 a gallon, up 50% from 2007, the EIA said. Prices are projected to peak in June at $4.78 a gallon.

"This reflects strength in diesel demand, particularly in emerging markets," the EIA said.

NEW YORK, June 10, 2008 (Dow Jones Newswires)