BOISE High crude oil prices, political
violence in Venezuela, and OPEC's decision to cut output may
push U.S. gas prices to new record highs as early as this
week, according to AAA Idaho.
Based on AAA's Daily Fuel Gauge Report (www.fuelgaugereport.com),
Idaho and U.S. average prices for self-serve regular gasoline
are $1.71. The U.S. average price is just pennies short of
record levels set last August 30, when the average mark hit
Idaho's all-time mark is not in immediate jeopardy
of being eclipsed. Idahoans paid an all-time average high
price of $1.837 on September 4, 2003.
A variety of factors largely tied to supply
are putting pressure on pump prices, said AAA Idaho
spokesman Dave Carlson. Crude oil futures closed at
$36.74 per barrel yesterday at a time when the economy is
beginning to expand and we're consuming more petroleum-based
Since January 1, U.S. prices have risen 23 cents.
Idaho's prices, which were already a dime or so higher then,
have risen about 12 cents during the same period.
The run up in crude prices at the highest
mark since March of last year when oil traded at a high of
$39.99 prior to the start of the war with Iraq is largely
to blame for higher pump prices that already average $2.17
The travel organization said a renewal of political
violence in Venezuela, accompanied by threats by that country's
president to cut oil and gasoline shipments to the United
States, is also a factor in higher prices. The timing of that
violence, along with OPEC's decision to trim one million of
barrels per day starting March 1, will put more pressure on
pump prices. In addition, another 1.5 million barrels are
scheduled to be cut starting April 1.
Last week, a ship that sank in a channel of
the Mississippi River contributed to higher gasoline prices
throughout the Southeast and Midwest. Though a temporary problem,
Carlson said the event illustrates how fragile the U.S. gasoline
distribution has become and will remain for the foreseeable
prices creep toward the $3 mark at a San Francisco station.
By James R. Healey
Nationwide, a gallon of unleaded regular averaged $1.705
3.2 cents less than the record set last Aug. 30, motorists'
club AAA reported this week. Ten states were within 3 cents
of their average highs, close enough that they could set records
Motorists face climbing prices for another two or three weeks,
forecasts Fred Rozell, gasoline expert at Oil Price Information
Service. "We'll probably break the record nationally
Friday," he predicts.
The climb has put both the government and private groups
on alert for price gouging. The Department of Energy said
that "spikes in gasoline prices are always of concern
and something the Department of Energy monitors very closely."
Motorists who think they've been charged unfairly high prices
can report to the government at 800-244-3301 or gaswatch.energy.gov.
The Federal Trade Commission investigates complaints of price-gouging.
"We're concerned about prices going so high this early
in the year," says Geoff Sundstrom, spokesman for the
national AAA organization. "Our sense of it is that,
for the short term, prices are going to continue going up."
He won't predict how high, though, because "forecasts
about high prices can become self-fulfilling" as stations
raise prices because motorists are expecting it.
Prices are rising on fears of shortages and in response to
consistently high prices for crude oil from which gasoline
is made. Crude oil makes up 48% of the price of gasoline.
West Texas Intermediate crude, the U.S. benchmark also called
light, sweet crude, was $36.66 a barrel for April delivery
at the close of New York trading Tuesday, down 20 cents from
Monday. Oil prices have been higher than that only 33 times
in the government's 20-year database. The record: $40.42 in
1990, equivalent to $57.27 today, adjusted for inflation.
Petroleum traders feared shortages after a shipping accident
Feb. 21 blocked traffic on the lower Mississippi River, halting
gasoline barges trying to get into the Gulf of Mexico and
on to Florida. The Coast Guard reopened the river to partial
"A few stations around Tampa ran out of unleaded, and
the terminals were nearly out, but it was a matter of hours"
until supplies were normal again, says Tom Kloza, oil analyst
"We've asked all the AAA clubs to keep a sharp eye and
report any outages, and we've been in touch with the Department
of Energy to share information" if regions run out of
gas, Sundstrom says.
The U.S. Energy Information Administration said in recent
report: "Gasoline inventories are below the normal range
for this time of year, meaning that should problems occur,
there is little available supply immediately on hand either
to meet increased demand or to respond to refinery, pipeline
or other infrastructure problems that may occur."