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Oil Prices to Reach All-Time High

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In its monthly short-term outlook, the Energy Department expects U.S. benchmark crude oil prices to average over 100-hundred dollars a barrel in 2012 and touch an all-time high amid rising demand as global economies grow. This report signals continuing high energy costs for farmers already squeezed by increasingly expensive fuel. West Texas Intermediate crude is forecast to average $100.25 a barrel this year, up 5.7 percent from the level of 2011. The 2012 estimate was revised up by 2.3 percent from the department’s projection a month ago, and would be a record high not adjusting for inflation.

 

Retail diesel will average about $3.85 a gallon in 2012, up 1 cent from 2011 and a record high. The American Farm Bureau Federation says it will cost a farmer nearly 1,040-dollars to fill the 270-gallon tank on a Case IH 9370 tractor with diesel. That’s up 43 percent from 2010 and up 77 percent from 2009.

 

The U.S. Energy Department expects China and the Middle East to lead growth in global petroleum consumption over the next two years. Additionally, any supply disruptions in key producing regions could spike oil prices higher. The Energy Department projected global oil consumption at a record 89.38 million barrels a day in 2012.

 

Source: NAFB News Service