Oil in April 2000
W A S H I N G T O N, April 6 - The good news for consumers is gas prices are anticipated to drop this summer. But the bad news is the decline will be slow. With an increase in international oil production as a backdrop, the Energy Department today dramatically revised its forecast for summer gasoline prices. The agency said prices should peak later this month and begin dropping sometime in May, averaging about $1.46 a gallon throughout the summer. And there's even more good news: Gasoline prices may dip lower still by fall, according to the agency. Prices may fall to a national average of $1.39 after Labor Day, the department's Energy Information Administration said in its revised short-term forecast. "By then I expect we will have started to see some economic growth deterioration and I think from there we probably will see demand start to come under some pressure," said Peter Beutel, president of Cameron Han
Other non-OPEC producers also have said they would increase production. Revisions Still 25 Percent HigherBut don't get too excited just yet. But Energy Secretary Bill Richardson has said repeatedly that with the additional oil production from OPEC and other producers, prices should gradually recede. The agency predicts refiners should have no trouble meeting the increase, barring any major refinery shutdowns. OPEC agreed to boost production by as much as 1. The agency's latest revision is still 25 percent higher than summer prices a year ago. "We are more optimistic today. The average motorist is expected to pay about $170 more for gasoline this summer than last, according to the EIA. market by June as a result of a decision March 28 by the Organization of Petroleum Exporting Countries. The report also predicted that crude oil prices will continue to drop for the remainder of the year, assuming continued increases in world production. Worries about stocks aside, the latest gas price revision is good news for the Clinton administration that has been fretting over the prospects of gasoline prices soaring to $2 a gallon this summer and additional potential shortages. And although summer gasoline prices will be 25 percent higher than last year, demand is expected to remain strong, exceeding summer demand a year ago.
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