# Presentation: 082781

## 2008 Summer TransportationFuels Outlook

***2008 Summer Transportation******Fuels Outlook***

**Guy Caruso****Administrator **
**Energy Information Administration**
** ****EIA 2008 Energy Conference **
***30 Years of Energy Information and Analysis***
**April 8, 2008****Washington, DC**

## Rising world oil consumption  
Low global surplus oil production capacity 
Insufficient non-OPEC oil supply growth relative to demand 
Supply concerns in international oil markets 
Together these factors contribute to high prices for petroleum products. 

- Low global surplus oil production capacity
- Insufficient non-OPEC oil supply growth relative to demand
- Supply concerns in international oil markets
- Together these factors contribute to high prices for petroleum products.* *

**Key Factors Driving the Short-Term Forecast**

## World Oil Consumption Is Projected toGrow by 1.2 million bbl/d in 2008

**Forecast**

**World Oil Consumption Is Projected to****Grow by 1.2 million bbl/d in 2008**

## World Oil Spare Production Capacity Is Projected to Increase, But Is Still Below Historical Norms this Year

**Forecast**

- Note: Shaded area represents 1997-2007 average (2.5 million barrels per day)

**World Oil Spare Production Capacity Is Projected to Increase, But Is Still Below Historical Norms this Year**

- Million barrels per day

## The Balance Between Global Consumption and non-OPEC Supply Growth Drives Oil Prices

**Forecast**

**The Balance Between Global Consumption and non-OPEC Supply Growth Drives Oil Prices**

## Crude Oil Prices Are Projected to Average$103 per barrel this Summer

**$103 per barrel**
**July 2008**

**West Texas Intermediate (WTI)**
**Crude Oil**

**$74 per barrel**
**July 2007**

**Crude Oil Prices Are Projected to Average****$103 per barrel this Summer**

**Forecast**

- Dollars per barrel

## Much higher crude oil prices

Decline in gasoline consumption 
Surge in fuel ethanol production 

High gasoline inventory levels 

Lower imports and production from crude oil

Weaker refining margins for gasoline

- Decline in gasoline consumption
- Surge in fuel ethanol production
- High gasoline inventory levels
- Lower imports and production from crude oil
- Weaker refining margins for gasoline

**Major Characteristics of 2008 U.S. Summer****(April – September) Outlook for Gasoline**

## Sustained Higher Gasoline Prices Begin toShow Up In Lower Gasoline Consumption

**Forecast**

**Decline**** in Motor**
**Gasoline Consumption**

**Sustained Higher Gasoline Prices Begin to****Show Up In Lower Gasoline Consumption**

- Percent change from
- prior Summer

## Ethanol Production and Capacity Are Expectedto Show Significant Growth in 2008

**Ethanol Production and Capacity Are Expected****to Show Significant Growth in 2008**

**Forecast**

- Billion gallons per year

## High Gasoline Inventories and Ethanol Production Growth Reduces Refinery Production and Imports

**Forecast**

**High Gasoline Inventories and Ethanol Production Growth Reduces Refinery Production and Imports**

- Change from prior summer
- (million barrels per day)

## Summer Retail Regular-Grade Gasoline Prices Projected to Average $3.54 per Gallon

- * Retail price minus crude oil cost minus taxes, per gallon

**Summer Retail Regular-Grade Gasoline Prices ****P****rojected to Average $3.54 per Gallon**

- Dollars per gallon

## Regular Gasoline Summer Prices Vary by Region

**U.S. Average = $2.94**

**U.S. Average = $3.54**

- Summer = April through September average

**Regular Gasoline Summer Prices Vary by Region**

- Dollars per gallon

## Summer Retail Diesel Prices Are Projected to Average$3.73 per gallon, up 88 cents from Last Summer

*** Retail price minus crude oil cost minus taxes, per gallon **

**Summer Retail Diesel Prices Are Projected to Average****$3.73 per gallon, up 88 cents from Last Summer**

- Dollars per gallon

## Higher 2008 Natural Gas Spot Prices Are Projected

**Higher 2008 Natural Gas Spot Prices Are Projected**

- Dollars per thousand cubic feet

## Growth in U.S. Residential Electricity PricesIs Expected to Pick Up Slightly During 2008

**Forecast**

- Change from prior year

## Oil and Gasoline:  Growing world oil demand outside the United States continues to keep crude oil prices high.  
Crude oil expected to remain near $100 for the rest of 2008;

Gasoline prices are expected to average $3.54 per gallon over this summer:  Diesel prices expected to average $3.73. 
Market uncertainties are many and may significantly impact prices and supplies during the rest of 2008.   
Natural Gas.  Henry Hub spot price expected to average $8.59 per thousand cubic feet in 2008, $1.42 above the 2007 average. 
Electricity Prices. Residential electricity prices projected to grow at a slightly faster rate in 2008.

***Oil and Gasoline:***  Growing world oil demand outside the United States continues to keep crude oil prices high.
- Crude oil expected to remain near $100 for the rest of 2008;
- Gasoline prices are expected to average $3.54 per gallon over this summer:  Diesel prices expected to average $3.73.
- Market uncertainties are many and may significantly impact prices and supplies during the rest of 2008.**  **** **
***Natural Gas.***  Henry Hub spot price expected to average $8.59 per thousand cubic feet in 2008, $1.42 above the 2007 average.
***Electricity Prices. ***Residential electricity prices projected to grow at a slightly faster rate in 2008.

**Summary**