UPDATE: WTI sets new record at $122.73 per barrel

West Texas Intermediate crude oil rose as high as a new record $122.73 per barrel in trade on the New York Mercantile Exchange on Tuesday before easing back to close at $121.84, still $1.87 higher than Monday’s close.

With Goldman Sachs (NYSE: GS) predicting that oil prices could rise as high as $150 to $200 per barrel, possibly as soon as within the next six months, the US Energy Department’s Energy Information Administration issued a new prediction that crude oil will average $110 per barrel this year.

The EIA also said that US demand for petroleum products will drop by 330,000 barrels per day this year, but that higher demand in emerging economies will mean a rise of 1.2 million barrels per day in global demand this year.

Nymex June gasoline was up 6 cents to $3.11 per gallon after setting a new record at $3.126 per gallon earlier in the session, while June heating oil added 5 cents to $3.36 per gallon.

Nymex natural gas dropped 3 cents to $11.15 per million British thermal units.

At-the-pump prices for gasoline in the US dropped 0.1 cent overnight to $3.61 per gallon even as the EIA predicted that pump prices will peak at an average of $3.73 per gallon in June.