History and Outlook for Gasoline Prices

1
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
2
Pennsylvania Gasoline Prices Closely Follow the
U.S. Average
U.S. and Pennsylvania Retail Regular Gasoline
Prices
Source AAA Fuel Gauge Report
3
Long-term Gasoline Price Trend Turned Upward in
1999
Source Energy Information Administration
4
Crude Oil is Largest Contributor to Gasoline
Price Increase Since Last Year
Components of Retail Gasoline Prices U.S.
Average, June
2.156 per Gallon
1.969 per Gallon
82.5
117.5
39.5
39.1
30.9
14.7
44.0
44.3
June 2004
June 2005
Source Energy Information Administration
5
How High Will Crude Oil Prices Rise Before Demand
Growth Slows Substantially?
60?
Source Reuters
6
World Oil Demand Growth Has Accelerated
Source History EIA Projections Short-Term
Energy Outlook, June 2005.
7
OPEC Spare Capacity Is Extremely Tight Right Now
Source Energy Information Administration
estimates.
8
Global Inventories Are in Normal Range, But
Forward Cover is Low
Source Energy Information Administration
9
OECD Inventories and Spare Production Capacity
Explain Most of Recent Price Variation
Source Reuters Spot Prices, EIA modeling.
10
Crude Oil and Product Markets Move Together
Crude Oil and U.S. Average Gasoline Prices
Source EIA Retail Prices, Reuters Spot Prices
11
Gasoline Supply/Demand BalanceReflected in
Spreads
Spot Gasoline Price
WTI Price
Source Reuters
12
U.S. Gasoline Inventories Are High, But Demand
Growth Puts Forward Cover Relatively Lower
Source Energy Information Administration.
13
Refining Capacity Surplus Disappearing, Creating
Short-Term Challenge
Forecast
Operable Capacity
Gross Inputs
Sources History EIA Projections Short-Term
Energy Outlook, June 2005.
14
Retail Gasoline Price Changes Lag Spot Prices
U.S. Average Regular Gasoline Prices
Sources EIA Retail Prices, Reuters Spot Prices
15
Retail Gasoline Price Changes Can Be Predicted
From Spot Prices
U.S. Weekly Average Regular Gasoline Price Changes
Source EIA
16
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
17
Crude Oil and Gasoline Prices Are Expected to
Remain High for the Foreseeable Future
Crude Oil and U.S. Average Gasoline Prices
Forecast
Sources History EIA Projections Short-Term
Energy Outlook.