Posted on 04/06/2008 11:05:38 AM PDT by kellynla
NEW YORK — Retail gas prices surged to another milestone, rising above $3.30 a gallon Friday, and appear poised to rise further in coming weeks as supplies tighten.
Oil prices, meanwhile, supported the gas price rally by jumping more than $2 a barrel after a dismal employment report sent the dollar lower.
At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That's the latest in a series of records, and about 60 cents higher than a year ago.
In Ventura County, the average price of regular unleaded hit a record $3.68 a gallon Friday, according to the Automobile Club of Southern California.
During the past week, prices in the county have been climbing by a few cents per day.
A few weeks ago, Jack Kyser, chief economist of the Los Angeles County Economic Development Corp., said he expected prices to fall as oil speculators backed off.
Now, he's not so sure.
"We could very likely see $4," he said. "It's going to be painful."
As investors are fleeing to commodities such as oil, gold, wheat and corn, people are starting to look at Washington, D.C., to curb speculation, Kyser said.
"You have speculators globally now," Kyser said.
"This is going to be a tough time for anybody who has to use an oil-based product. We've already seen chaos in the aviation industry, with Aloha and ATA going out of business."
While oil's surge above $100 over the past month has boosted gas prices so far this year, analysts now expect gas prices to continue rising regardless of what direction crude takes. The Energy Department expects prices to peak near $3.50 a gallon later in the spring, but many analysts predict that the spike could approach $4.
That's because gasoline supplies are falling, in part because producers are cutting back on output of the fuel because of the high cost of crude — the more expensive crude is, the more refiners have to pay and the lower their profits are.
They're also in the process of switching from producing winter grades of gasoline to the less polluting but more expensive grade of fuel required in the summer.
"That cuts back on some of the supply and helps to pump up the price," said Mike Pina, spokesman for AAA.
The margin between the price that refiners pay for crude and receive for selling the products they make from it is about $11 to $12 a barrel right now, according to the Oil Price Information Service.
However, that margin has occasionally slipped into negative territory in recent weeks and is well below margins of $37 a barrel that refiners earned last spring.
In futures trading, meanwhile, oil futures rose Friday after the Labor Department said employers cut payrolls by 80,000 jobs last month, much more than analysts had expected.
The unemployment rate rose to 5.1 percent.
That news sent the dollar lower and pushed light, sweet crude for May delivery up $2.40 to settle at $106.23 a barrel on the New York Mercantile Exchange.
Gasoline futures for May delivery rose 3.24 cents to settle at $2.7567 a gallon.
Gasoline futures were also boosted Friday by a fire that shut down part of a refinery in Torrance.
Let it go to $5. per gallon.
Lock your doors and let the good times roll.
Dear Democrats: I would like to thank you for your inaction/no votes on allowing the US to build new refineries and also for not allowing us to drill for our own oil.
Why does it seem like gas is the only product that producers and consumers think normal supply-and-demand laws don’t apply? Prices rise where there is high demand. Prices fall when there is low demand. It’s simple.
Libs refuse to understand the causal relationship between gasoline prices, refinery construction and new domestic oil exploration.
It would be nice if the republican “leadership” highlighted and pounded this point instead of suggesting alternative energy subsidies.
Required by who? GOVERNMENT.
Yet the GOVERNMENT blames the producers for high prices, and drags them to Washington to answer idiotic questions from grandstanding politicians.
remember the meeting VP cheney had with the saudis a few weeks back that supposedly was going to stabilize the market at around $85 a barrel ?
Gas should cost at least $4/gal in CA and FL for their refusal to help the USA by allowing drilling in their off-shore waters. There won’t be many tourists on their pristine beaches if no one can afford to drive this summer. Those two states have no business getting any fuel as the energy crisis deepens.
The entire country would be paying $4/gal if TX and LA had been so selfish all these years.
Federal excise taxes 18.4 cents per gallon for gasoline and 24.4 for diesel.
California... 63.9 gas and 72.0 diesel.
As do a lot of people. Even some FReepers. The hypocrites who masquerade as environmentalists are strangling our supply and rejoice at higher prices. All because they want to squeeze out SUVs. Idiots.
“Libs refused to understand?” NO....Libs are STOOOPID and Liberalism IS a mental deficiency.
This is caused almost entirely by leftie environmentalists.
“They’re also in the process of switching from producing winter grades of gasoline to the less polluting but more expensive grade of fuel required in the summer.”
Of course. That was my first thought—it’s that time of year when 153 different state regulations force the refineries to change their products in very complicated ways.
Also, there hasn’t been a new refinery built in a dog’s age, because the NIMBYs won’t allow it. And the regulatory process is like navigating through a minefield.
California, which always bitches the loudest, is the worst offender.
This is what is crippling the country, oh well, we are all frogs in the boiling water.Ho hum.
What is there left to say. This is going to escalate forever.
No one in a leadership position is going to address this other than blame the public for being so damn stupid as to have a gasoline powered cars any way. Its “our” fault.There is no end to gas escalation, the Arabs and the other suppliers can take it all the way up to $500 a barrel and NOTHING will be done. THE FIX IS IN.
They mean to cripple us.Period.
I think this is the time of year when refineries have to shut down to switch over to, what I call, the "Summer Flavor" of gasoline to satisfy the EPA and state regulations.
Hell, why not just pull the plug, shut down all the refineries, and let the pencil necks in Washington and Sacramento operate the refineries.
Actually, the article makes the point that, because the American economy will be in tatters (shown by a poor job showing), gasoline prices will rise.
Less demand? Higher prices.
It's the new way.
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