EIA Predicts Oil and Gas Prices Will Continue to Rise

The Dept of Energy's Energy Information Administration is now predicting gas prices will peak at $4.15 per gallon sometime in August. The EIA is also predicting gas prices will average $3.78 per gallon for the year.

Diesel prices are predicted to remain steady at $4.71 per gallon for the next few months, but the average price will be less than that over the next few years, at $4.32 a gallon.

The EIA also predicts:

• The spot price of natural gas will average $11 per Mcf for the year.
• Electricity prices will rise 3.7% in 2008 and 3.6% in 2009.

Crude oil projections are now at $122 per barrel in 2008 and $126 per barrel in 2009, which would be a drop in current prices. It would also be a shift in the way the EIA has predicted things to go, since they have been projecting oil to drop in price in 2009. (The EIA predictions have not exactly been spot on lately. For instance, they predicted gas prices to be at $3.60 in June)

Last month, the EIA projected oil at $110 per barrel in 2008 and $103 per barrel in 2009. The EIA now expects a lower increase in oil production from countries outside of OPEC.

See the current and previous issues of the "Short-Term Energy Outlook" on the EIA Web site, and for the latest prices on oil, gasoline, and diesel fuel, see the New York Mercantile Exchange Web site and the American Automobile Association's "Fuel Gauge Report."

Photo from flickr by marshall astor.