World benchmark crude oil prices reached their highest level of this year at the end of April, fell by about 10% by May 9, and have changed very little since then. The U.S. Energy Information Administration (EIA) still expects oil markets to tighten through 2012 given projected world oil demand growth and slowing growth in supply from countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC). The projected U.S. refiner crude oil average acquisition cost rises from $104/barrel in 2011 to $108/barrel in 2012, about the same as the previous month’s Outlook.

Based on the outlook from the National Oceanic and Atmospheric Administration (NOAA) for the current Atlantic hurricane season, EIA estimates median (mean) outcomes for total shut‐in production in the Federal Gulf of Mexico (GOM) during the upcoming hurricane season (June through November) of about 19 million barrels of crude oil. Actual shut‐ins are likely to differ significantly from this estimate depending on the number, track, and strength of hurricanes as the season progresses.

Regular-grade retail gasoline price averaged about $3.96/gal. during the first half of May as unexpected refinery outages and disruptions in distribution caused by the flooding of the Mississippi River and its tributaries temporarily counterbalanced the impact of lower crude oil prices. In recent weeks, gasoline prices have been falling, however, as the refinery situation has begun to recover. EIA expects the May average price of $3.91/gal. will be the peak monthly average price this driving season. Still, EIA forecasts that the regular-grade motor gasoline retail price will average $3.75/gal. during this summer’s driving season (from April 1 through Sept. 30), up from $2.76/gal. last summer.

To read additional EIA reports, link here.