The top forecaster of the U.S. Department of Energy expects gasoline prices to climb an additional 20 cents a gallon by December and said prices could go still higher if OPEC doesn't increase production, The Wall Street Journal reported Tuesday.
The estimate came as mixed signals on the intentions of the Organization of Petroleum Exporting Countries contributed to a drop in oil prices on futures markets.
The drop, coming after several weeks of new oil-price highs, signals increasing volatility in oil markets as the price has approached 100 dollars a barrel.
On Monday, the national average retail price for a gallon of regular gasoline was 3.10 dollars, according to the AAA, formerly the American Automobile Association.
Guy Caruso, who heads the department's Energy Information Administration, said the price of gasoline will continue to rise even if crude oil prices don't because the past jump in crude prices hasn't been fully passed on to gasoline consumers by oil refiners.
He also said he expects crude oil prices to remain high through the first three months of 2008, and warned that supplies coming onto the market after that will be more costly because of "dramatic increases in the cost of doing business" for oil companies.
Caruso said the weakness of the U.S. dollar has helped to fuel continued high demand for oil in other countries
He said his agency predicts crude oil will drop to 80 dollars a barrel later next year, assuming OPEC increases supplies.
The Department of Energy expects that nations that don't belong to the price-setting cartel, such as Brazil, Russia, Azerbaijan and Canada, will increase their production next year, he said.
Source:Xinhua
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