Retail Motor Gasoline Price* Forecast Doesn’t Reflect Potential Volatility
Sources: History: EIA; Projections: Short-Term Energy Outlook, May 2001.
- EIA’s gasoline price forecast has gasoline prices, on a monthly average, possibly exceeding $1.70 per gallon. Of course, weekly prices would likely peak this summer even higher. While this forecast looks very smooth, we believe there is a substantial risk of volatility.
- Regional price volatility around this base case can be substantial. The situation of relatively low inventories for gasoline could set the stage for some regional imbalances in supply that could once again bring about significant price volatility in the U.S. gasoline market.