Energy Sector Roundup: $4 a Gallon Gas

Summer Driving Likely to Cost More

The Energy Department says regular gasoline prices could reach $4 or more a gallon by this summer. In its monthly Short-Term Energy Outlook, the department's Energy Information Administration (EIA) says average monthly gas prices should peak at just over $3.60 a gallon in June. But daily or weekly prices could be above or below that. There could also be significant regional differences.

"Prices along the West Coast and more specifically, California are often well above the U.S. average price," EIA said.

EIA says high-priced gasoline will likely trim demand by about 0.4 percent to 9.4 million barrels per day.

The cost of crude is driving prices for other petroleum products. EIA says West Texas Intermediate crude is expected to average $101 a barrel this year compared with $72.32 a barrel last year. The average price is forecast to be around $104 a barrel in the second quarter.

While gasoline is headed for $4 a gallon, diesel has already crossed that boundary in much of the country. Diesel's national average price rose 1.3 cents to $4.02 a gallon on Tuesday, according to AAA said.

EIA now thinks U.S. consumption of petroleum will fall by about 90,000 barrels a day this year because of the economic slowdown and high prices a significant change from a month ago when EIA forecast a 40,000 barrel per day increase.

Demand at the Pump Dropped Last Week

High pump prices may already be forcing many drivers to limit their visits to service stations. A survey by MasterCard SpendingPulse found gasoline demand fell 2.5 percent last week compared with the week before.