The end may be in sight for skyrocketing gasoline prices, a key Energy Department official said yesterday in what was, finally, an encouraging word for motorists.
The average nationwide price for regular grade should peak in August at $4.15 a gallon, Guy Caruso, head of the federal Energy Information Administration, said at a congressional hearing.
That is just a dime above yesterday's average of $4.05 a gallon, which might not seem like much of a climb after prices have soared 33 cents in the last month and $1.08 since late December.
But Caruso had some sobering news, too: Prices are likely to remain close to or above $4 for the rest of this year and average $3.92 a gallon through 2009, the Energy Department agency forecast.
Moreover, the government tends to err on the optimistic side. Even as he spoke, crude-oil prices jumped again, edging for a time yesterday up to $138.30 a barrel. Light, sweet crude futures ended the day up $5.07 to settle at $136.38 a barrel on the New York Mercantile Exchange.
Yesterday's rise was prompted by crude's biggest drivers - a weak dollar and supply concerns, which brought buyers back in force.
There were these related developments yesterday:
The Organization of Petroleum Exporting Countries wants a "solution" to high oil prices and a probe of the role of energy speculators when governments of oil-consuming and oil-producing countries meet June 22 in Saudi Arabia, OPEC's secretary general said.
A meeting of world energy ministers in Rome two months ago did not solve the issue, OPEC Secretary General Abdalla el-Badri said.
"This one is different. This one is specifically to tackle the high oil prices, why they are high, who is to blame," el-Badri said in an interview. "Is this a real shortage in the market, or speculation, or the dollar? What is wrong?"
OPEC left oil-output quotas unchanged at its last three meetings, saying the market was well-supplied.
Spain got tough with striking truckers who have disrupted food and fuel supplies, using riot police to lift blockades of a border crossing with France and a highway near Madrid, and making dozens of arrests.
Unions representing the strikers vowed to press on, rejecting a package of measures presented by the government to end the three-day nationwide protests over rising fuel prices.
The European Commission cautioned European Union governments against giving short-term handouts to fishermen, farmers, truckers and others suffering the brunt of high fuel costs. It called instead for restructuring ailing industries such as fishing, and cutting taxes on energy-saving products and services.
Oil companies did not make the necessary investments to clear the current supply bottleneck because they never expected demand for oil to surge so rapidly, BP P.L.C. chairman Peter Sutherland said. He said high prices were not driven by market speculators or by fears that oil was running out.
In yesterday's energy forecast, Caruso told the House Select Committee on Energy Independence and Global Warming that crude-oil prices were expected to average $126 a barrel in 2009, or $4 higher than this year, as supplies and demand remained tight.
But predicting future oil and gasoline prices is highly uncertain with the volatile global oil markets, Caruso acknowledged.
There is "no short-term fix" to the price spiral, Karen Harbert, executive vice president of Institute for 21st Century Energy, a group affiliated with the U.S. Chamber of Commerce, told the House panel.
Outlook given yesterday to Congress by the Energy Department.
Average $3.92 a gallon nationwide through 2009.
Peak gasoline price:
About $4.15 national average in August.
Average $126 a barrel in 2009, or $4 more than this year.
Long-range oil prices:
Average $86 a barrel
in 2010, rising to $107 in 2015.
SOURCE: Associated Press