# Presentation: 795976

## History and Outlook for Gasoline Prices 

**Energy Policy Forum to Discuss **
**“****Possible Solutions to High Gas Prices”**
**Moderated by Congressman Jim Gerlach**

- Doug MacIntyre/Michael Burdette
**Petroleum Division**
**U.S. Energy Information Administration**
- July 6, 2005
- Owen J. Roberts High School, Pottstown, PA

## Pennsylvania Gasoline Prices Closely Follow the U.S. Average

***U.S. and Pennsylvania Retail Regular Gasoline Prices***

**Source: AAA Fuel Gauge Report**

## Long-term Gasoline Price Trend Turned Upward in 1999

**Source: Energy Information Administration**

## Crude Oil is Largest Contributor to Gasoline Price Increase Since Last Year

***Components of Retail Gasoline Prices***
***U.S. Average, June***

**$1.969 per Gallon**

**$2.156 per Gallon**

**44.0**

**30.9**

**39.5**

**82.5**

**44.3**

**14.7**

**39.1**

**117.5**

**June 2004**

**June 2005**

**Source: Energy Information Administration**

## How High Will Crude Oil Prices Rise Before Demand Growth Slows Substantially?

**Source: Reuters**

**How High Will Crude Oil Prices Rise Before Demand Growth Slows Substantially?**

**$60?**

## World Oil Demand Growth Has Accelerated

**Source: History:  EIA;  Projections: Short-Term Energy Outlook, June 2005.**

## OPEC Spare Capacity Is Extremely Tight Right Now

|  | Current Excess Capacity |
| --- | --- |
| Saudi Arabia | 0.9 – 1.4 |
| Other Persian Gulf | 0.0 |
| Other OPEC | 0.0 |

**Source: Energy Information Administration estimates.**

## Global Inventories Are in Normal Range, But Forward Cover is Low

**Global Inventories Are in Normal Range, But Forward Cover is Low**

**Source: Energy Information Administration**

## OECD Inventories and Spare Production Capacity Explain Most of Recent Price Variation

**Source: Reuters Spot Prices, EIA modeling.**

## Crude Oil and Product Markets Move Together

***Crude Oil and U.S. Average Gasoline Prices***

**Source: EIA Retail Prices, Reuters Spot Prices**

## Gasoline Supply/Demand BalanceReflected in Spreads

**Spot Gasoline Price**

**WTI Price**

**Source: Reuters**

## U.S. Gasoline Inventories Are High, But Demand Growth Puts Forward Cover Relatively Lower

**U.S. Gasoline Inventories Are High, But Demand Growth Puts Forward Cover Relatively Lower**

**Source: Energy Information Administration.**

## Refining Capacity Surplus Disappearing, Creating Short-Term Challenge

**Gross Inputs**

**Operable Capacity**

**Forecast**

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook, June 2005.**

## Retail Gasoline Price Changes Lag Spot Prices

***U.S. Average Regular Gasoline Prices***

**Sources: EIA Retail Prices, Reuters Spot Prices**

## Retail Gasoline Price Changes Can Be Predicted From Spot Prices

***U.S. Weekly Average Regular Gasoline Price Changes***

**Source: EIA**

## Retail Gasoline Prices Are Still Much Lower Than Early 1980s When Adjusted for Inflation

***U.S. Monthly Average Regular Gasoline Retail Price***

**Sources: EIA, Bureau of Labor Statistics**

## Crude Oil and Gasoline Prices Are Expected to Remain High for the Foreseeable Future

***Crude Oil and U.S. Average Gasoline Prices***

**Sources: History:  EIA;  Projections: Short-Term Energy Outlook.**

**Forecast**