EIA expects brief spike in gasoline prices

Aug. 8, 2012 at 8:30 AM
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WASHINGTON, Aug. 8 (UPI) -- The Brent crude oil spot price is expected to increase in the second half of 2012, leading to a short-term spike in retail gasoline prices, a report said.

The U.S. Energy Department's Energy Information Administration said it expects Brent crude to average around $103 per barrel during the second half of the year, a $3.50 increase from the EIA's estimate in July.

"With higher crude oil prices, EIA has increased the average regular gasoline retail price forecast for the third quarter of 2012 to $3.49 per gallon from $3.39 per gallon in last month's outlook," the agency said in its August report.

An oil pipeline rupture in Wisconsin in late July, coupled with the disruption of a gasoline line in the state, lead to a regional spike in retail gasoline prices.

AAA, in its daily gasoline report, states that a gallon of regular unleaded gasoline in Chicago averaged $4.40 by Wednesday, a 50 cent increase from last month. The national average was reported by AAA at $3.65 for a gallon of regular unleaded, compared with $3.38 last month.

The EIA said that as area refineries come back into service, however, a previous supply gap in gasoline should disappear "almost entirely."

The agency expected regular gasoline retail prices to level out at around $3.53 for the year, however, the same as reported for 2011.

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