The EIA's latest "Short-Term Energy Outlook" blames rising oil consumption and a lack of surplus oil production capacity for the current volatility in oil prices. The EIA notes, however, that current world oil prices "may not entirely reflect pure economic fundamentals of the world oil supply market," as concerns about oil supply disruptions may have added a premium to what otherwise might be a lower world crude oil price.

The good news, though, is that high gasoline inventories are helping to insulate gasoline prices from the volatile oil market.

Publication date: 08/16/2004