Released on July 26, 2006
(Next Release on August 2, 2006)

Hitting "300"
For baseball players, hitting .300, or averaging 3 hits for every 10 at-bats, is a very significant accomplishment. While hitting .300 may be good for baseball players, having gasoline prices reach $3.00 per gallon is nothing to cheer about for consumers. EIA�s latest weekly survey of retail gasoline stations showed that the average price for regular gasoline across the entire country averaged just over $3.00 per gallon as of July 24, only the second time in the history of the survey (which dates back to 1990) that this level has been reached in nominal terms. However, prices in inflation-adjusted terms are still well below the monthly average of about $3.20 per gallon (in 2006 dollars) in March 1981. Moreover, because today�s car and light truck fleet has significantly better average fuel economy than the vehicles that were in use 25 years ago, the current average real fuel cost per mile of travel today remains significantly below its 1981 level.

Comparisons to prior periods of high fuel prices may provide perspective, but they are small consolation to drivers concerned about the present market situation. For them, the key question is the future direction of prices this year. So, what can U. S. consumers expect over the next several weeks? EIA expects gasoline prices to remain in the vicinity of $3.00 per gallon for much of the rest of the summer, with any significant price declines not likely to occur before September (after the Labor Day holiday) when demand typically drops sharply. It remains to be seen whether prices during one or more of the remaining weeks of summer will exceed the previous record level of $3.07 per gallon, set on September 5, 2005. Both August and September can be problematic when trying to forecast gasoline prices, as in August, the chance of severe thunderstorms affecting power to refineries rises, which can lead to less gasoline production than might otherwise occur. For both August and September, an increased likelihood of hurricanes, particularly this season, is another major uncertainty that can dramatically affect gasoline prices, especially if the hurricanes are powerful and hit the major oil producing and refining centers along the Gulf Coast, as Hurricanes Katrina and Rita did last fall. Nevertheless, absent any major shutdowns as a result of hurricanes, severe storms, or other factors, U.S. gasoline consumers in many parts of the country could see pump prices dip significantly below $3.00 per gallon in September.

U.S. Average Retail Gasoline Price Gains 1.4 Cents
The U.S. average retail price for regular gasoline increased by 1.4 cents last week to reach 300.3 cents per gallon as of July 24, which is 71.4 cents higher than last year. Prices rose for the fourth week in a row, hitting above the $3 mark for only the second time in history. East Coast prices rose 2.4 cents to 300.4 cents per gallon, with the Lower Atlantic region showing the largest regional price increase of 3.4 cents per gallon to average 295.7 cents per gallon. West Coast prices remained the highest in the nation, losing 1.2 cents to 313.7 cents per gallon. California prices were down 2.0 cents to 322.0 cents per gallon.

Retail diesel fuel prices gained 2.0 cents to reach 294.6 cents per gallon as of July 24, which is 60.4 cents higher than last year. Prices were up throughout most of the country, with the Gulf Coast and Rocky Mountains seeing the largest increases of 2.7 cents each to 289.5 cents per gallon and 298.7 cents per gallon, respectively. West Coast prices remained the highest in the nation, falling 0.4 cent to reach 304.7 cents per gallon. California stayed flat at 309.7 cents per gallon.

Weekly Propane Stockbuild Continues Strong
U.S. propane inventories continued rising last week with a strong 2.2-million-barrel addition that put the nation�s supply of propane at an estimated 55.3 million barrels as of July 21, 2006. For the first three weeks of July, propane inventories have achieved more than 90 percent of the 5-year average build for this month, all but ensuring the July stockbuild will match, or even surpass, the 5-year average. Still, propane inventories at the U.S. level continue to lag year-ago weekly inventories by about 3.8 million barrels. Regional activity was mixed, with only the Gulf Coast showing a significant gain that totaled 2.2 million barrels. Inventories in the Midwest reported a relatively modest 0.5-million-barrel gain, while at the same time, East Coast inventories reported an inventory loss of 0.3 million barrels. Inventories in the combined Rocky Mountain/West Coast regions were relatively unchanged last week. Propylene non-fuel use inventories moved sharply higher by 0.4 million barrels during the week to account for 7.3 percent of total propane/propylene inventories, compared with the prior week�s 6.8 percent share.

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