Posted on 04/21/2008 6:13:11 PM PDT by TigerLikesRooster
Retail gas hits record $3.50 a gallon as oil marches higher
By ADAM SCHRECK, AP Business Writer
1 hour, 11 minutes ago
Rising gasoline prices tightened the squeeze on drivers Monday, jumping for the first time to an average $3.50 a gallon at filling stations across the country with no sign of relief.
Crude oil set a record for the sixth day in a row — this time closing above $117 a barrel — after an attack on a Japanese oil tanker in the Middle East rattled investors.
"It's killing us," said Jean Beuns, a New York cab driver who estimated he now makes $125 to $150 less per month than in the fall because of costlier gas. "And it was so quick. Every day you see the price go up 5, 6, 10 cents more."
Diesel prices at the pump also struck a record high of $4.20 a gallon, according to AAA and the Oil Price Information Service. That's sure to add to truckers' costs and drive up the price of food, clothing and other goods shipped by truck.
"You and I are going to pay more," said Bob Costello, chief economist of American Trucking Associations. "Exactly how much ... I can't tell you, but it's got to show up."
Gasoline and diesel prices are expected to keep climbing as they trace the path of crude. Oil prices are charging ahead along with a host of commodities that are enticing speculators seeking hedges against a weakening dollar.
Light, sweet crude for May delivery rose to a record $117.76 a barrel on the New York Mercantile Exchange before settling at $117.48, up 79 cents from Friday's close.
Gas jumped more than a nickel over the weekend and is up 23 percent from a year ago. Drivers in New Jersey are paying the least, while drivers in California pay the most, $3.86 a gallon for regular unleaded.
The Energy Department predicted earlier this month that monthly average gasoline price will peak at more than $3.60 per gallon in June and could even reach $4.
"It's uncharted territory," said Tom Kloza of the Oil Price Information Service, Wall, N.J. "I don't think we're done, but I have to believe we're in the eighth or ninth inning" of price increases.
The higher prices are already prompting some drivers to cut back. In New York, Elvis Ragbir and Anthony Winckler said they are driving less and taking the subway more.
"I'm spending my gas money on MetroCards," Winckler said in the waiting room of a vehicle inspection station in Manhattan. Ragbir, a delivery truck driver, said he is looking to trade in his Lexus LS 400 for a smaller car.
In downtown Chicago, Sharon Cooper spent $52 to fill up three-quarters of the tank in her Toyota Highlander SUV. She said she tries not to let the prices get to her, although she too is changing her habits and buying a bike to commute to work.
Energy Department data show Americans used about 1 percent less gas in the four weeks ended April 11 than they did a year earlier.
That change, while not drastic, is significant, Mariano Gurfinkel, project manager at the Center for Energy Economics at the University of Texas at Austin, who expects per-capita demand to drop further this summer unless gas prices fall.
Americans will continue to drive, but some may change their summer vacation destinations as gasoline costs continue to make a bigger dent in their pocketbooks, Gurfinkel said.
Crude oil rose Monday after the 150,000-ton tanker Takayama was struck off the coast of Yemen as it headed for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said.
Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat. None of the ship's 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker's stern was repaired, the company said.
Meanwhile, militants in Nigeria renewed their attacks on oil facilities in the south of the African nation. Nigeria is a major supplier to the U.S., and attacks in the past two years have cut nearly a quareter of the country's oil output.
"There's clearly some geopolitical tension in the market," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. "This will die down, but the market is pretty jittery at the moment."
An OPEC official also said over the weekend that the group was not likely to increase production. The official said oil prices would likely rise and said OPEC might boost production if the price pressure was because of a supply shortage, something he doubted.
In other Nymex trading, heating oil futures rose 1.9 cents to settle at $3.3114 a gallon while gasoline futures fell about a penny to settle at $2.9791 a gallon. Natural gas futures jumped 14.6 cents to settle at $10.733 per 1,000 cubic feet.
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I wish it was only $3.50 a gallon. Near $4.00 here in Nor Cal and well over $4.50 just north of here.
How many of the people, do you think, who are complaining about the price of gas are against drilling in ANWR, offshore, using more coal and other supply solutions? Far too bloody many is the answer!
This will cause a permanent change that will be the downfall of OPEC. They must know this will now drive shale extraction as the profit margin has been met.
“an attack on a Japanese oil tanker in the Middle East”
Obamatopia will fix all this./sarc
And no one will do anything about it. The sheep will continue to pay more for their cars. Just like I will. Just like you will. And there’s nothing you can do about it.
At $3.69 today and expecting $3.79 tomorrow, so we aren't far behind you.
I’ve cut back on driving and bought fuel efficient vehicles. I use about 20% less energy at home this year than last. If prices keep going up, I’ll keep driving less (fewer trips to family, stay far closer on vacations, etc). If you went from a 15 mpg vehicle to say 34, you basically cut your gas price by more than half, which is what I did 3 years ago.
Note to self: Fill the boat now, while it’s cheap.
Then we will see export controls, and the usual market distortions.
Let's see, going into the worst recession in at least a generation, and putting on tariffs.....what does that sound like? Hmmmm......
It sounds like a thunder clap...or it will.
I don’t need a 73’ anymore than anyone else. I am equipped to handle it now but we must get our allies together.
What allies? Do you think they will give us charity? Our debased dollar can’t buy what they can buy.
It is a mess and America will slow to a crawl just to make China get off the dollar. It’s one hell of a balancing act. We should have responded to this years ago.
As this government/leadership continues to send billions of our dollars to every other country on earth as foreign aid gifts. While many of these countries receiving *our* money, want to see us on our knees in a bad way. From a distance, it has to appear like we're committing national suicide.
Energy independence now.
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