Diesel and gasoline prices continue to decline in the U.S., with gasoline possibly poised to drop down near a two-year low, according to data tracking by the Energy Information Administration (EIA).
The U.S. average price for diesel dropped 4.6 cents to $3.945 per gallon this week and has declined 8.2 cents per gallon over the last 14 days, the EIA reported. However, diesel still remains 11.7 cents per gallon more expensive compared to the same time period in 2011, the agency noted.
Diesel prices in all regions of the country declined, with prices in the Rocky Mountains falling the most by some 7.2 cents per gallon, followed by the Midwest (a 5.9 cent per gallon decline) and the West Coast (a 4.5 cent drop).
The EIA added that the Rocky Mountain region is the only area in the U.S. where diesel prices are actually lower compared to the same time period in 2011 – some 4.7 cents per gallon lower, it said.
Gasoline prices are undergoing a more precipitous drop though they, too, still remain above pricing points established during the same week in 2011.
The EIA reported that the average U.S. gasoline price fell 9.5 cents this week to $3.254 per gallon and that prices are now down 14 cents per gallon compared to two weeks ago. However, the agency noted that prices remain 2.5 cents per gallon higher compared to the same time period last year.
All regions in the U.S. reported big declines in week-over-week gasoline prices, with the Midwest registering the largest drop at 14 cents per gallon, followed by the Rocky Mountains (a decline of 11.7 cents per gallon) and the West Coast (a 8.7 cent drop).
Tom Kloza, chief analyst at the Oil Price Information Service (OPIS), noted in commentary for CNN/Money that gasoline prices could reach a two-year low as consumption is off 2% to 3% versus last year while an ongoing boom domestic energy production is helping curb oil prices.
Indeed, the EIA reported last week that while the U.S. imported almost three times as much energy as it exported in 2011 – consuming 97 quadrillion Btu (quads) of energy last year, despite only producing about 78 quads – that ratio that is much lower than the import peak in 2002, when energy imports were more than eight times energy exports.
The agency noted that petroleum made up about 86% of energy imports in 2011, with Canada supplying the largest share, followed by Mexico, Saudi Arabia, Venezuela, and Nigeria, in that order. Overall, about 40% of U.S. petroleum imports came from countries in the Organization of the Petroleum Exporting Countries (OPEC), while 60% came from non-OPEC countries such as Canada, Mexico, Russia, and Brazil, the EIA said.
Going forward, the agency predicts that the Brent crude oil spot price will average $110 per barrel in the fourth quarter of 2012, while the West Texas Intermediate (WTI) crude oil spot price – which helps gauge the impact of domestic energy production – will average $89 per barrel.
EIA projects that the Brent and WTI crude oil spot prices are forecast to average $104 per barrel and $88 per barrel, respectively – resting on the assumption that U.S. real gross domestic product (GDP) finishes 2012 at 2.1% growth and dropping to 1.8% growth in 2013.
In terms of fuel prices, the agency predicts that regular gasoline retail prices in the U.S. should average $3.63 per gallon in 2012 and $3.43 per gallon in 2013, compared with $3.53 per gallon in 2011. Diesel fuel retail prices in the U.S. should average $4.02 per gallon during the fourth quarter of 2012 before falling to an average of $3.84 per gallon in 2013, it said.