The Energy Information Administration predicts U.S. retail gasoline prices will fall at least 10¢/gal by the end of summer from the spring peak.
EIA's latest weekly statistics show average U.S. pump prices have recently dropped by nearly 5¢/gal.
It said, "Gasoline prices had risen rapidly in the spring due to a number of influences, including higher crude oil prices, seasonal demand increases, and unusually tight gasoline supply marked by lower inventory levels.
"However, crude oil prices have been falling since April and are expected to settle at levels that will push through some additional declines to pump prices the rest of the summer.
In its quarterly short term energy outlook, EIA predicted average U.S. retail prices, including tax, of $1.27/gal by September, compared with the peak of $1.38/gal the week of May 17.
"Despite the expected downward trend, a generally tighter oil market should maintain gasoline prices above comparable 1995 levels for the rest of the year. Steady growth in gasoline demand is expected through the summer, with consumption rates consistently above 8 million b/d likely. However, weather-related weakness in the first quarter may keep 1996 growth below 2%."
EIA also predicted that in 1996 and 1997, total net U.S. petroleum imports will reach or exceed 1977's record high. Total net imports would equal 50% of total petroleum demand in 1997 in the base case. The net import share of demand could be 49-52% in the high-to-low price ranges.
EIA also noted average natural gas spot and wellhead prices for the summer were boosted temporarily by a stretch of hot weather in parts of May and June.
"The early heat wave pushed power generation and gas consumption to unexpected highs just as serious efforts to replenish very low underground storage levels were getting under way. Average wellhead prices might hover above $2/Mcf this summer, 25-30% above summer 1995 prices.
EIA said the gas market continues to be concerned by the combination of record low levels of gas in storage, moderate rates of refill, and the hot weather. It said at current refill rates, working gas storage will be below normal levels at the beginning of the heating season Nov. 1.
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