NEW YORK, (Reuters) - U.S. gasoline prices will peak at a record average $4.10 a gallon later this month thanks to surging world crude oil prices, adding pressure to an already troubled U.S. economy, the government's top energy forecaster said Monday.
The price spike will cut into energy consumption in the United States, but not enough to pull back the price of oil below $100 a barrel any time soon, Guy Caruso, the head of the U.S. Energy Information Administration (EIA), told the Reuters Global Energy Summit in New York.
"We still have some pass-through (to the gasoline pump) of the higher crude oil prices that we've seen now over the last number of weeks," Caruso said. "If the crude oil prices stay around $120, $125, it looks like (gasoline) might be somewhere in the $4.10 area."
The price of crude oil accounts for about 73 percent of the cost of making gasoline. "The biggest (factor) is the crude oil price," he said.
The national pump price jumped almost 4 cents over the last week to $3.98 a gallon, up 82 cents from a year ago, the EIA said Monday in its weekly survey of service stations.
The West Coast has the most expensive gasoline at $4.17 a gallon, up 14 cents. San Francisco had the highest city price at $4.24, also up 14 cents.
The Gulf Coast states had the lowest regional price at $3.85 a gallon, up 2 cents. Houston had the lowest pump price, up 1.4 cents at $3.80.
The higher fuel price will further reduce overall domestic oil demand, according to Caruso. He said the EIA will lower its estimate for U.S. oil demand this year by 10,000 barrels a day when the agency releases its new monthly energy forecast next week.
"We'll revise it down a little bit," he said, just like the EIA has done with every monthly demand forecast so far this year. However, he cautioned that the numbers for the agency's June report are not finalized yet.
The EIA also plans to lower its projection for growth in oil supplies this year from non-OPEC countries. Caruso said non-OPEC oil levels will be "very disappointing" due to a drop in Russian oil production and a "steeper" fall in Mexican output.
"You've got this global market still operating at very low spare (oil production) capacity, all of which is in Saudi Arabia," he said.
At the same time, demand in developing countries will remain strong, helping to keep oil prices above $100 a barrel this year and in 2009, according to Caruso.
"We're still going to be at this 1.2 million barrels a day growth this year in world demand, all outside of (industrialized) countries," he said. "We're (industrialized nations) an important part of the world market, but others are increasingly important as well."
Caruso said oil demand from Middle East countries should be up by 300,000 to 400,000 barrels a day this year due to stronger economies fed by profitable oil exports.
Oil demand in China has been particularly strong and will be even higher after many coal-powered electric plants were damaged by the country's recent earthquake and more distillate fuel is used for running portable electric generators, Caruso said.
After this summer's Olympics, he said China's oil demand should fall. "I don't think it's the kind of thing that's going to move the market. We're talking about probably, you know, less than 100,000 barrels a day," Caruso said.