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EIA hikes 2012 WTI oil price outlook to $100.25/bbl

01.10.2012  | 

The US Energy Information Administration (EIA) on Tuesday raised its 2012 oil price forecast by more than $2/bbl to $100.25/bbl, saying it assumes the US economy grows 1.8% this year. In last month's report, the EIA expected 2012 West Texas Intermediate crude to average $98/bbl



The US Energy Information Administration (EIA) raised its 2012 oil price forecast by more than $2/bbl to $100.25/bbl, saying it assumes the US economy grows 1.8% this year.

The EIA issued the forecast in its monthly Short-Term Energy Outlook, released Tuesday.

In last month's report, the EIA expected 2012 West Texas Intermediate (WTI) crude to average $98/bbl.

The agency, a unit of the Department of Energy, also said it expects WTI to continue rising, costing an average of $103.75/bbl in 2013.

Those forecasts represent an increase from oil prices last year, when WTI averaged $94.86/bbl according to the EIA.

Despite fluctuating for much of last year, WTI prices have risen steadily over the last month, lifted by concerns about Iran's nuclear program and the possibility of supply disruptions.

On Tuesday, front-month February crude rose $1.14, or 1.1%, to $102.45/bbl on the New York Mercantile Exchange.

The agency said its forecast assumes US real gross domestic product grows by 1.8% in 2012 and 2.5% next year. Global GDP should grow 2.9% in 2012 and 3.8% in 2013.

Despite the forecast for higher crude prices, the EIA said it expects US regular gasoline to average $3.48/gal in 2012. The forecast is still 3 cents higher than the outlook for 2012 regular gasoline last month.

The agency expects regular gasoline in 2013 to rise to an average $3.55/gal.

Diesel fuel is expected to run an average of $3.85/gal this year, identical to last month's forecast and up a penny from the 2011 average.

In 2013, diesel prices should rise to an average of $3.93/gal.

Dow Jones Newswires

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, "Calculating real wagesBy Donald J. BoudreauxSunday, February 19, 2006Like many pundits today, New York Times comlunist Paul Krugman often asserts that middle-class Americans have suffered stagnant income growth since the mid-1970s. In one of his columns last June, Krugman summarized his gloomy assessment of economic performance in America over the past three decades: "The middle-class society I grew up in no longer exists."He's right. The society that he (and I) grew up in indeed is history. But this fact deserves applause because ordinary Americans' standard of living today is so much higher than it was 30 years ago.I admit that standard-issue data mask the truth of my claim. Most notably, after adjusting for inflation, wages of the average worker haven't risen since the mid-'70s -- while during the previous 30 years these wages escalated impressively.But data can be tricky. For a variety of reasons, the data relied upon by Krugman and others to paint a picture of an economy that's failing the middle-class are incomplete or misleading.One of the trickiest maneuvers for statisticians is to adjust wages for inflation. This adjustment is typically done by (as economists say) deflating actual wage numbers by the Consumer Price Index (CPI). In theory, as the average of all consumer-goods prices rise, so does the CPI. And the higher the CPI, the higher the reported rate of inflation and, hence, the greater the amount by which actual wages must be discounted to translate them into "inflation-adjusted" (or "real") wages.Average hourly wages of private-sector workers in 1975 were $4.73; today this figure is $16.34. But when deflated by the CPI, we find that today's average wage is worth only $4.62 in 1975 dollars. Looks bad for the average wage earner.But can we trust the CPI? I think not. For a variety of reasons, it significantly overstates the amount of inflation we've suffered -- and, thus, it misleads us in estimating changes in real wages over time."--30--So Dan B. says the CPI way overstates inflation. That is his stance on this issue. It is the opposite of Vange's stance. Through such relatively new spaces at 99 cent stores and Craigslist, I find many items cheaper than ever. I won't even talk computers and cameras. The only thing that truly seems to get more expensive is military hardware/services and health services. Those are the two truly parasitic industries upon us----and religion, but that is volitional, so let it be.

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