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Gas Pump Prices to Shatter Records
Reuters ^ | April 2, 2005 | Bernie Woodall

Posted on 04/03/2005 6:16:32 PM PDT by BulletBobCo

NEW YORK (Reuters) - Regular gasoline pump prices in the United States may average as high as $2.50 by Memorial Day, shattering the records as futures prices climb to new peaks, analysts said on Friday.

U.S. retail gasoline is already running above $2.15 a gallon, well beyond last spring's peak of $2.05, according to government and industry surveys.

"Surging NYMEX futures are certainly an upward pressure on prices at the pump, so I would certainly expect to see retail prices move up sharply over the next few weeks," said Tim Evans, analyst with IFR Energy Services.

Gasoline futures on the New York Mercantile Exchange (NYMEX) hit a record Friday over $1.70 a gallon, keeping stride with a spike in the cost of crude as soaring global energy demand threatens to outpace supply.

While it is difficult to predict pump prices based on futures traded on the NYMEX, the increase will probably get passed on to motorists, with prices running up to $2.50 a gallon in the next month, said Ed Silliere, analyst with Energy Merchant Intermarket Futures.

The U.S. Energy Information Administration uses spot -- physical -- prices to predict retail prices, and the NYMEX is the benchmark off which spot prices are calculated, said Mike Burdette, analyst with the EIA.

U.S. average retail prices generally are 60 cents to 65 cents higher than spot prices, which on Friday were running about $1.70 a gallon in the U.S. Gulf Coast.

Friday's spot prices, Burdette said, would predict average retail gasoline prices of $2.30 to $2.35 per gallon, but only if the spot price stays put for at least several days.

CALIFORNIA TAKES THE BRUNT

Pump prices in California on Friday were 30 cents higher than the national average, according to the AAA's survey, and further spikes could send prices close to $3.

California tends to have higher prices than other states because of more stringent environmental rules governing fuel that out-of-state refiners have trouble meeting.

While soaring prices have yet to show an impact on fuel demand in the United States, that could be coming soon, IFR's Evans said. He pointed to the third quarter of 2004, when high gasoline prices helped lower year-on-year demand growth to 0.4 percent, less than the rate of population growth.

Current gasoline demand is running about 2 percent higher than last year, according to government figures.

EARLY SPIKE?

Evans said that if 2005 plays out like last year, the record high prices could hit before peak summer driving demand kicks in, and ease by July.

"Overall, I think that means we could see retail gasoline prices rise to the $2.30-2.40 level on a nationwide average, but that they would fall back to less than $2.00 by the 4th of July," Evans said.

The NYMEX front-month, for deliveries to the New York Harbor in May, settled on Friday at $1.7310 a gallon, and hit a record high of $1.7360 a gallon, with June delivery futures striking a record $1.75.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: gasprices; hype; markettop
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To: satchmodog9

$2.23 in central Indiana. Driving less and less these days. I can't afford luxury trips any more, not that I did any before.


21 posted on 04/03/2005 6:56:16 PM PDT by pctech
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To: SamAdams76

Gosh, I thought everyone knew by now that Bush gets blamed for Any and ALL bad news, especially regarding the economy. The MSM, don't ya know, has convinced most sheeple that the Bush clan and their oil buddies (along with Haliburton) are responsible for supply & demand, not to mention oil prices.


22 posted on 04/03/2005 6:57:41 PM PDT by demkicker (John McCain is a power hungry traitor and proved it on 2/19/05 in Iraq)
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To: little jeremiah
$2.49 a couple of days ago out here in the boondocks.

$2.49 yesterday and $2.50-$2.55 today in southern CA. It’ll go higher.

23 posted on 04/03/2005 6:58:58 PM PDT by Who dat?
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To: BulletBobCo

Can someone explain why gas prices are so high? Assume complete ignorance of even basic economic theory.


24 posted on 04/03/2005 7:02:34 PM PDT by Zack Nguyen
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To: SamAdams76

We were told that fuel prices would go down after we "stabilized" Iraq. Just the opposite happened.

One of the first things we did was secure the oil wells so that Saddam wouldn't light 'em up like he did after the Kuwait invasion.

Who is Iraq selling their oil to now?

Just wondering...........


25 posted on 04/03/2005 7:11:46 PM PDT by panaxanax
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To: panaxanax

Me too.


26 posted on 04/03/2005 7:15:01 PM PDT by satchmodog9 (Murder and weather are our only news)
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To: Zack Nguyen

speculation in the financial markets. the hedge funds and brokerage houses are now using oil as they did with tech stocks in the late 90s. that's about $15 in the price per barrel right now.


27 posted on 04/03/2005 7:19:24 PM PDT by oceanview
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To: petercooper

Thank you for the graph of rationality. Saves me digging it out.


28 posted on 04/03/2005 7:20:09 PM PDT by Uncle Miltie (Impotent [birthrates] Lazy [unemployment %] Cowardly [militarily unprepared] Euroweenies!)
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To: satchmodog9

Remember right after Jimmy Carter (the peanut farmer) was elected how the price skyrocketed on peanut butter?

Weird, huh?


29 posted on 04/03/2005 7:20:11 PM PDT by panaxanax
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To: satchmodog9

$2.35 here. We finally gave in and bought a new car! Just in time! lol Our Mountaineer gets about 15-20, our Vibe gets about 25-30.In our town, I saw gas prices jump 20 cents a gallon in one day.


30 posted on 04/03/2005 7:24:37 PM PDT by ozaukeemom (Nuke the ACLU and their snivel rights!)
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To: SamAdams76

its a simple political reality. and Bush doesn't help himself by seeming to be disenaged about the topic - he never speaks about it, and when the administration does, they basically say that there isn't anything that they can do.

I have said it many times - open the strategic reserve and sell oil from it to US refiners at $42 per bbl. Then go sign a contract with the new iraqi government to replace those reserves at $40 per bbl, the $2 spread being spun politically as "war reparations". That will play politically, because americans expected an improved oil supply situation as part of the iraqi war. once the speculators and hedge funds see this move, they will start dumping their positions - and the $12-15 component of the price that is due to speculation can be driven from the market.


31 posted on 04/03/2005 7:25:48 PM PDT by oceanview
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To: BulletBobCo

Speculation is killing the market and our economy. I have a bad feeling that prolonged prices in the two dollar range will kill our economy. I hope we can do somthing about it (market wise).

It would be nice to see hydrogen fuel cars or somthing come up that would compete market wise against oil combustion vehicles. That would drive down the market.


32 posted on 04/03/2005 7:28:11 PM PDT by BoBToMatoE
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To: ozaukeemom

Upstate New York running $2.29 for regular - $2.49 for super. Everyday it seems to climb a couple of cents.

We were looking to buy a motorhome and semi-retire.......not now, unless we can get one for free.


33 posted on 04/03/2005 7:30:11 PM PDT by panaxanax
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To: BulletBobCo

Blah, blah, blah. Still lower than before, when adjusted for inflation. Compare the price of a gallon of gas with the price of a pack of cigarettes or a bottle of beer now and 30 years ago. Beer, cigs and gas were all about 35 cents. Cigs are now $4.50 or so, beer is $3 at least, and gas is up to $2.24 here.


34 posted on 04/03/2005 7:31:09 PM PDT by ozzymandus
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To: Zack Nguyen

Subtantial increase in money supply ($US) leads to higher prices for everything. Econ 101


35 posted on 04/03/2005 7:33:54 PM PDT by hubbubhubbub
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To: ozaukeemom

I am glad my new Ford had the 4.6 instead of the big boy 8.


36 posted on 04/03/2005 7:41:15 PM PDT by satchmodog9 (Murder and weather are our only news)
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To: ozzymandus

Yes, and how much of each products price is mf'n taxes.


37 posted on 04/03/2005 7:42:26 PM PDT by satchmodog9 (Murder and weather are our only news)
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To: BulletBobCo

Maybe mergers that reduce competition have something to do with it; to wit, ExxonMobil, ChevronTexaco, ConocoPhillips, BP-Amoco-Arco, and Royal Dutch Shell.

I know some of them have reported record earnings in the past year or two.


38 posted on 04/03/2005 7:44:28 PM PDT by FoxInSocks
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To: satchmodog9

In the case of cigarettes and gas, most of the price is tax.
There's plenty of tax on alcohol, too. Nobody in the MSM seems to know that.


39 posted on 04/03/2005 7:49:04 PM PDT by ozzymandus
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To: ozzymandus

Just replace Gas with Taxes and see how you would feel. :)


40 posted on 04/03/2005 7:52:15 PM PDT by HKTechBoy (There is no gray area in Life)
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