Friday, April 13 , 2007 – High fuel prices could last into 2008, spurred on by international tensions in oil-producing regions, officials with the U.S. Energy Information Administration stated in the Short-Term Energy Outlook released Tuesday, April 10.
The current price surge, which began in February, is a result of international tensions, tight domestic supplies, an early start to spring and summer seasonal demands and a cutback in OPEC production, the EIA report stated.
“Any real or potential disturbance to petroleum demand or supplies such as unusual weather, unscheduled refinery disruptions, or geopolitical uncertainty in oil-exporting regions can all result in large price increases in a short period of time,” EIA officials said.
A combination of international and domestic supply and demand factors boosted the national average price of on-highway diesel to $2.84 per gallon earlier this month, an increase of more than 18 cents per gallon since April 2006.
Projected OPEC supply cuts to North America were not as drastic as early predictions, but that may be offset by a slight decrease in domestic oil supplies this summer.
Energy officials predict that domestic crude oil prices will be about $65 per barrel this summer. Prices in January were as low as $50.51 per barrel and as high as $66 in March.
For truckers, 2007 is the first year ultra-low sulfur diesel has been widely available as it is phased in to reduce sulfur emissions.
ULSD now makes up 60 percent of all on-highway diesel, where it was less than 1 percent of on-highway diesel in 2006.
The changeover at refineries has also affected fuel prices, EIA officials said.
The fuel known as low-sulfur diesel will be phased out by 2010.