WASHINGTON - With oil prices recently spiking above $50 per barrel, the U.S. Department of Energy's (DOE's) Energy Information Administration (EIA) has revised upwards its projected average oil price for the first quarter of 2005, to $48.70 per barrel. That's a $2-per-barrel increase over last month's projection and a $13-per-barrel increase since the first quarter of 2004.

The EIA's latest "Short-Term Energy Outlook" finds that despite growing oil inventories, a projected 2.5 percent growth in oil demand per year will keep oil markets tight. As a result, the EIA projects that oil prices will stay above $45 per barrel through 2006, with the possibility of oil prices occasionally increasing well above $50 per barrel, as they have recently.

With oil prices high and refineries running near their capacity, gasoline prices have increased, with the average U.S. pump price for regular gasoline hitting $2 per gallon last Monday. Despite high inventories of gasoline in the United States, growing demand is expected to cause regular gasoline to average $2.10 at the pump from April to September, the peak months for driving. That's a 20-cent increase over last year's gasoline prices.