In its May Short-term Energy Outlook released last week, the Energy Information Administration revised lower its retail price forecast for gasoline and diesel fuel in 2009, while also adjusting down US and global oil demand, now expecting an even greater decline in world consumption this year.

“EIA is currently projecting a weaker global oil market for 2009 than anticipated in last month’s assessment. Expectations of global economic recovery and a resultant increase in demand were offset by initial data for the first quarter showing high oil inventories, weak consumption and higher-than-expected production,” said the Washington analysts in their monthly outlook.

Retail prices for regular grade gasoline is expected to average $2.12 gal this year, 4.0cts lower than projected in April, and down from the $3.26 gal average in 2008. During this summer driving season, which runs from April through September, regular gasoline retail prices are projected to average $2.21 gal, which is down roughly $1.60 from last summer.

Total U.S. petroleum deliveries—a measure of demand—dropped 3.6 percent from a year ago to 19.1 million bpd in April as a result of continued economic weakness, the American Petroleum Institute reported in its latest Monthly Statistical Report. Total product deliveries for the January through April period totaled 19.1 million bpd, down 4 percent compared with the first four months of 2008, and the lowest level for that period since 1998.

While gasoline deliveries increased slightly for the month versus last year, all other product deliveries fell, led by a sharp drop in distillate deliveries.

“Gasoline deliveries were up, if only because year-ago levels were the lowest for any April since 2003,” said API Statistics Manager Ron Planting. “Distillate deliveries were a full 13 percent down from a year ago, as demand for diesel for freight transportation fell.”