Ah. Spring. Astronomically, it ... wait a minute. Spring, EIA forecast ...? I just wrote about this Jan. 9. As you can see here, the EIA predicted $3.50 for a gallon of gas by June, the end of Spring. Are they changing their forecasts already? YES! According to Reuters demand for gas has dropped a lot (2.4 percent last week) and EIA analyst Doug MacIntyre "said he 'certainly' expects that his agency next month will publish lower spring gasoline price forecasts." So it worked? Did higher gas prices actually change behavior, cause demand to go down and the sink the price of gas with it?
So, what does all this mean? New forecasts, oil below $90, BP's lower profits? I will tell you exactly what it means: The U.S. government is really bad at predicting the future. A possible $1 swing for a forecast, a month after making it, for something just a few months away? Come on, EIA, you can do better than that. What will the price of oil and gas be? I don't know and I don't think anyone knows.
[Source: Reuters, CNN, Telegraph, NewsHour]