Motor gasoline market conditions in the U.S. are less tight at the beginning of the driving season this year than they were in 2001. However, higher crude oil prices since the end of 2001 and tightening oil markets worldwide have moved gasoline prices up rapidly this spring from winter lows, according to forecasts by the department's Energy Information Administration.
U.S. crude oil and gasoline inventories are now above last year's levels but are expected to decline to less ample levels through the summer and into the fall. U.S. motor gasoline inventories were 8.8%, or 17 million barrels, above year-ago levels at the end of March. Even with a greater inventory cushion this year at the start of the driving season, the summer average for nominal pump prices is expected to be the third highest on record, after 2001 and 2000.
Average gasoline prices will most likely remain below the 2001 average for the driving season, but there is a slight possibility that they could be higher than last summer's levels, especially if refining problems develop or the crude oil market becomes tighter.