Slide 7 of 15
- As we just saw, one of the primary factors impacting gasoline price is the crude oil price.
- This graph shows monthly average spot West Texas Intermediate crude oil prices. Spot WTI crude oil prices broke $36 per barrel in November briefly as anticipated boosts to world supply from OPEC and other sources did not show up in actual stocks data.
- Crude oil prices are expected to be about $30 per barrel for the rest of this year, but note the uncertainty bands on this projection. They give an indication of how difficult it is to know what these prices are going to do.
- Also, EIA does not forecast volatility. This relatively flat forecast could be correct on average, with wide swings around the base line.
- With the EIA forecast for crude prices staying high this year, gasoline prices can be expected to remain high.