Gas Prices May Soar Through Summer
How does $1.70-a-gallon sound? In case you haven't noticed, gas prices are rising, and there's nothing to indicate they will come down soon.
Just since mid-December, the price has jumped almost 3 cents per gallon, Ray said.
Nationwide, gasoline prices average $1.41, and some analysts predict prices may reach to $1.70. And the summer travel season is coming up.
"We anticipate prices may continue to increase," Ray said. "We don't see anything to enhance supplies in the future."
The cause of this is the agreement among the Organization of Petroleum Exporting Countries (OPEC) to reduce supplies, an extremely cold winter on the East Coast which means more crude is refined into heating oil instead of gasoline and an improved Asian economy that increased demand in that part of the world, Ray said.
U.S. refineries normally increase production of gasoline during the first three months of the year in anticipation of higher summer demand. That's not happening this year because the high crude-oil prices and short supplies have prompted many refiners to cut back operations.
Fears that gas prices will go higher were raised Monday when crude-oil futures closed at $30.25 a barrel - tipping $30 for the first time in nine years.
Analysts believe that OPEC will come under increasing pressure at its next meeting in late March to raise production.
Roger Diwan, managing director for global oil markets at The Petroleum Finance Co. in Washington, expects OPEC will increase oil production by between 1.5 million and 1.7 million barrels a day. But because inventories at refineries already are low, "that won't be enough to bring prices down dramatically and change the gas outlook in the United States"
The rise in crude has pushed up heating-oil prices this winter, prompting the U.S government to make $200 million in aid available to low-income families. The average retail price for heating oil has nearly doubled over the past year, to $1.66 per gallon from 86 cents.
Clinton said he ordered the release of $125 million from the Low Income Home Energy Assistance Program to help families who must rely on oil to heat their homes. He said that amount was all that is left in the fund this year.
Clinton also said he would seek $600 million in emergency funds so that there will be money during the hot summer months.
On Saturday, U.S. Energy Secretary Bill Richardson is expected to travel to Mexico to discuss oil prices. Mexico is not an OPEC member, but cut production in sympathy what the oil cartel. He is to visit OPEC members Saudi Arabia and Kuwait in the near future. From Seattle Times http://seattletimes.com Feb.16, 2000.
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