Posted on 01/16/2004 6:19:44 AM PST by Tumbleweed_Connection
Drivers of SUVs and other gas guzzlers may want to keep their vehicles parked over the summer. That's because some experts are saying that gas could -- gulp -- hit the $3-a-gallon mark. "It is not only possible, it is probable," said Fred Rozell, director of gasoline pricing for Oil Price Information Service, which tracks and reports on the oil industry. "In the summer, we consume more gasoline than we produce. "[This year] we won't have that extra supply to help us." Winter weather, bolstering demand for heating fuels, already has cut U.S. crude stocks to the lowest level since 1975. And with simple economics -- in particular the supply and demand rule -- consumers can expect the price of gas to reach record levels. Those prices would especially be possible in Chicago, where government regulations require gas stations to supply more costly reformulated gasoline to reduce smog. "This could be the year that gasoline prices start to change the way people behave," Rozell said. "They may drive less or look to buy more fuel-efficient vehicles and get rid of their SUVs." That $3 threshold shouldn't come as a big surprise to pump watchers. Over the last few days, prices at the pump have done more than just trickle upward --they have soared. Prices have surged more than 7 cents a gallon in the last three weeks. Several factors are being blamed for the uptick, including rising crude oil prices, a weaker U.S. dollar, colder weather that drove up demand for home heating oil, and two U.S. gasoline reformulations, said analyst Trilby Lundberg. Earlier this week, the all-grades average retail price of gasoline was 8 cents higher than it was at this time last year. The national weighted average price of gasoline, including taxes, at self-serve pumps was about $1.55 for regular, $1.65 for midgrade, and $1.74 for premium. But those numbers are only expected to rise. According to the U.S. Energy Information Administration, the forecast for prices to remain stable through the summer banked on crude oil being about $30 a barrel. In the last week, the price of crude oil has flirted in the mid-$30s and could rise further. Retail analysts say gasoline costs rise about 2.5 cents per gallon for every $1-a-barrel increase in the price of crude oil. And combine that with near record low inventories -- some of the lowest since the long-line days of 1975 -- and drivers may want to learn that CTA map. But not everyone is ready to buy into the higher prices. "There is no way that anyone can predict the price of oil next week, let alone next summer," said Geoff Sundstrom, a spokesman for the American Automobile Association. "There is no need to start scaring the consumer with what prices might be." Sundstrom said the reasons for the short-term increase have been the cold weather and the low inventory, both of which he says will be over in the next few months.
I suppose many families won't be able to go on vacation.
Let's see, hmmm, a 400 mile drive to the vacation spot; otherwise they'd fly; 400 back, 200 there, = 1,000 miles.
In a vehicle that gets 20 mpg, that'd be 50 gallons. Normally the cost, at $1.50/gal., would be $75. But now gas may be $3.00/gal. thus adding an additional $75 to the vaction!
Yup!
Cancel the vacation! Go out for that $150 family dinner at home!
Oy!
Now it's approximately half or so! Seems to me we'd be payin' about .75 cents/gal. right now if Uncle Sam didn't have "sticky fingers."
In other words, whatever must be changed, must be changed.
Richard W.
And just what stops "lower income folks" from increasing their income? Laziness? Lack of developing marketable job skills? Personal choices?
Poor people, by and large, are poor because they make the choices that keep them poor, i.e., not developing job skills, making poor life choices, etc. Rich people, by and large, are rich because they make the choices that make them rich, i.e., developing marketable job skills, making good life choices, etc.
we need less govt, not more
Mike
Jackpot. Gas - for what it is - is the most underpriced commodity in the world. Especially when you consider that ordinary bottled water, a renewable resource, is much more expensive per gallon than gazolene.
Whenever some so-called self-described "expert" comes out and says something "COULD" happen, I immediately react that that particular even could equally NOT happen. In this case, it's just some goon wanting a little face time from a media all too willing to print anti-Dubya stories in an election year.
Michael
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