Low gasoline prices for American consumers are here to stay for the rest of the summer, according to the U.S. Energy Information Administration (EIA).
The agency says regular gasoline will average $2.38 per gallon through September, new projections show-marking the period as the second-cheapest summer for fuel since 2005.
Low crude oil prices keep gasoline prices from rising, even as demand in the U.S. peaks from road trip season and high cooling needs. EIA projections show crude barrel prices nearing $50 for the rest of summer as production peaks from three countries unbound by OPEC's international production cuts - United States, Libya, and Nigeria.
"Crude oil prices have fallen in recent months as U.S. oil producers have increased drilling activity and production-with many of them hedging at higher oil prices seen in early 2017-and as Libya and Nigeria have produced at levels above expectations," the report says. "These developments have served to offset some of the production cuts agreed to by members of the Organization of Petroleum Exporting Countries (OPEC) and some other leading exporters with the intention of reducing elevated global oil inventories."
World oil demand growth will fall by 70,000 barrels per day to 1.47 million barrels per day in 2017, an earlier report from the EIA said. The agency also cut its projection for 2018 oil demand growth by 10,000 bpd to 1.61 million bpd. Oil prices averaged $46 a barrel in June-$4 lower than the month prior, which is the lowest average since last November.
The EIA expects national gas' share of the U.S.' total utility-scale electricity generation to fall from 34 percent last year to 31 percent by 2018 due to higher prices that will render the fuel more expensive than coal.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More