EIA Raises Oil Price Forecasts for 2012

The government of the United States recently raised its projections for the cost of oil and oil commodities following a 4% increase in oil prices in the month of July.

The Energy Information Administration forecasts the average crude price per barrel of West Texas Intermediate (WTI) for the present year at $93.90. That rate is slightly higher than the price it predicted in July of $93.83 per barrel.

In the New York Mercantile Exchange, the current crude price of the U.S. benchmark crude for delivery in September traded higher by 1.5%, or $1.42, to $93.62 per barrel.

The price forecasts were included in the August publication of the Short Term Energy Outlook released every month by the Energy Information Administration, the statistical branch of the United States Department of Energy.

Aside from changing its forecast for West Texas Intermediate, the EIA also adjusted its estimate for the crude price per barrel of Brent, the benchmark oil blend of Europe. Its latest projection is higher at $108.07 compared to its previous price of $106 per barrel.

Last month was the first time that the EIA included its price estimates for Brent crude. The current crude price of Brent stands at $11.87 per barrel, a rate that is higher by 2.1%, or $2.32.

For retail gas, the average forecast for the year is $3.53 per gallon, a higher projection versus its July estimate of $3.49 per gallon. The EIA projects the retail price of diesel to have a higher average of $3.84 per gallon compared to its estimate last month of $3.79 per gallon. The same upward estimate was made to the projected average prices of heating oil at $3.68 per gallon from July’s forecast of $3.64.

By: Chris Termeer