DOE sees moderately higher diesel prices ahead

Higher oil consumption as the global economy recovers should drive higher crude prices and, therefore, higher prices at the pump for diesel and gasoline in 2010, the U.S. Department of Energy’s Energy Information Administration concluded in its latest short-term energy outlook, released Wednesday, Sept. 9.

EIA forecasts the average diesel price to be $2.47 per gallon this year and $2.88 in 2010. Similarly, it projects gasoline prices to go from an average retail price of $2.34 per gallon for regular-grade in 2009 to $2.70 in 2010.

In the very near term, however, EIA believes gasoline prices will drop in the fourth quarter while diesel prices will rise slightly due to seasonal competition with heating fuel. The agency projects that gasoline prices will fall from $2.62 per gallon in August and September to an average of $2.56 per gallon over the fourth quarter of 2009. Meanwhile, diesel prices are expected to rise from $2.63 per gallon in August to $2.74 during the fourth quarter.

For EIA’s complete short-term energy outlook, click here.