U.S. gasoline demand this summer is forecast to increase 1.8% from last summer, helping to push pump prices to a peak monthly average of $2.35 a gallon in May, the federal government said today (April 7).
Reuters reports that American drivers will consume an average 9.331 million barrels per day of gasoline this summer, according to the Energy Information Administration (EIA). The forecast from Energy Department’s analytical arm is for the busy summer driving season running from April through September.
The expected growth in summer gasoline demand would be higher than the five-year average, the agency said.
“The higher demand is caused by the increasing number of drivers and vehicles, and increasing miles traveled per vehicle,” the EIA said. A flat to declining fuel efficiency in the entire U.S. vehicle fleet is also contributing to higher demand, it said.
The EIA also said it expects crude costs to stay above $50 a barrel for the rest of 2005 and 2006.
U.S. refiners’ summer production of gasoline should average 8.382 million barrels per day, up 0.5% from last year. “However, refinery output increases are not expected to keep up with demand growth due to limited growth in refiner capacity,” EIA said.
Imports will have to make up the difference to meet demand. This summer’s net imports of motor gasoline and blending components are projected to average a record 893,000 barrels per day, up 4.7% from last year.
But those foreign supplies “may be harder to obtain than in previous summers and are expected to be costly,” the EIA warned.
While gasoline prices should peak in May, the nationwide price for the summer should average $2.28 a gallon, up 37 cents from last year, and not far from this week’s $2.22 a gallon.