Gasoline Prices to Peak in May, DOE Says

U.S. gasoline pump prices should peak for the year in May, following a gain in crude oil prices and a spate of West Coast refinery problems, the U.S. Department of Energy said. Prices will peak at a national average of $1.18 a gallon, 11% higher than last year, according to the Short-Term Energy Outlook from the Energy Information Administration, a division of the DOE. The average summer price in the U.S. will be $1.13 a gallon, up about 10 cents from the year before. Four California refineries had problems that from mid-February onward caused U.S. inventories to tighten as supplies were transferred to the West Coast. That sent California prices soaring past $1.50 a gallon. Nationally, crude oil prices rose 37% in March, boosted by an agreement by oil-exporting countries to cut 2.1 million barrels a day of output, or 2.7% of world supply. “Typically, prices peak in June, but it’s going to peak in May” this year, said David Costello, the economist in charge of the report. In January, before the exporters pledged to cut production, the EIA predicted prices would peak at $1.08 a gallon. Gasoline demand is expected to be up 2%, aided by a 2.1% increase in highway travel, the report said. As before, demand this summer is expected to be a record.