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EIA: Gas Prices to Stay Above $4 For Rest of 2008

Gasoline prices will remain above $4 a gallon for the rest of the year, while oil prices will continued to be pressured by the tight market for crude, the U.S. Energy Information Administration said on Tuesday.

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Regular-grade gasoline in the United States is expected to average $3.84 a gallon in 2008, up from a previous forecast of $3.78 a gallon, the agency said.

But, for the remainder of 2008, pump prices are projected to remain well above $4.00 per gallon, the agency said in its Short Term Energy Outlook.

"This forecast reflects very weak gasoline margins, because of the decline in gasoline consumption and growth in ethanol supply," it said.

Oil prices, meanwhile, are expected to average $127 a barrel this year, up from the previous forecast of $122 a barrel, the agency said. In 2009 the oil prices are expected to average $133 a barrel.

"Global supply uncertainties, combined with significant demand growth in China, the Middle East, and Latin America, are expected to continue to pressure oil markets," the agency said.