DOE Lowers 2011 Diesel Price Forecast to $3.80 a Gallon
The Department of Energy lowered its 2011 diesel price forecast by a nickel to $3.80 a gallon and lowered its 2012 forecast by 14 cents, to $3.73, reflecting recent declines in oil prices.
Last month, DOE had lowered its diesel projections for 2011 and 2012 by 2 and 9 cents, respectively, in its monthly short-term energy outlook. This month’s outlook was released on Wednesday.
Gasoline will average $3.52 this year, down 4 cents from last month’s report. Gas will average $3.43 in 2012, down 11 cents from its previous outlook, DOE said.
Diesel averaged $2.99 a gallon and gasoline averaged $2.78 last year.
DOE’s monthly outlook often lags its weekly price survey. Diesel and gasoline have both dropped for five straight weeks to seven-month lows of $3.721 and $3.417 per gallon, respectively.
The higher prices this year reflect not only the higher crude oil prices than a year ago but also changes in the average refinery margins — the difference between refinery wholesale prices and the average cost of crude oil.
Gasoline refinery margin increases rose from 34 cents per gallon last year to 51 cents this year and are projected to slip to 43 cents in 2012.
Diesel refinery margins jumped from 39 cents a gallon in 2010 to 64 cents this year and are projected to fall back to 56 cents a gallon in 2012, DOE said.
Crude oil — which is currently trading in the mid-$80s per barrel, down from higher levels earlier this year — will average $99 a barrel in 2011 and $98 per barrel in 2012, down from the comparable projections of $100 and $103 in last month’s outlook.
