Gasoline prices could decline by 2010 amid a "potential oversupply" of oil products, even though U.S. refining capacity will be expanded less than previously thought, according to a new report by Edinburgh, Scotland-based consultancy Wood Mackenzie LTD.
Despite lagging refinery expansion and growing demand, the report suggests that new biofuels, natural gas liquids, and liquefied petroleum may replace some conventional fuels, resulting in a potential oversupply that depresses prices at the pump.
The central conclusion — that a glut of fuel supply from outside the conventional refining system could depress gasoline prices — differs from the consensus of many energy experts, which holds that the supply impact from biofuels and other sources will be limited between now and the end of the decade. The report comes amid an industry-wide reevaluation of refinery expansion projects that were once considered likely to be online by 2010....
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