Gov't Warns Against Gas Shortages
Posted: Fri Mar 05, 2004 1:34 pm
U.S. sees cause for concern over gas
By James R. Healey and James Cox, USA TODAY
The government amplified concern Thursday about rising gasoline prices and repeated a warning of possible shortages, but it didn't offer relief for either. "This administration is extremely concerned" about the near-record gas prices, Energy Secretary Spencer Abraham said, strengthening a department statement a day earlier that said "spikes in gasoline prices are always of concern."
Separately, the head of the department's Energy Information Administration, Guy Caruso, told a Senate panel that "many signs are pointing to a tight gasoline market this driving season," repeating the caution about possible shortages from a recent EIA analysis. Nationwide average price for a gallon of unleaded regular gas is $1.709, motorists' club AAA reported Thursday. The record was $1.737 Aug. 30 of last year.
California hit a statewide record of $2.178, AAA said, 0.1 cent higher than its previous record set last March 21. Six states were less than a penny from their highs Thursday.
Behind the increases:
• Fears of shortages. As warmer weather triggers more driving, demand for gasoline will rise from 8.8 million barrels a day now to 9.5 million by late summer. U.S. refineries can't make that much and depend on imported gas to fill the gap.
• Petro-politics: OPEC, the cartel that pumps one-third of world oil, says it will cut production April 1. Venezuela, a major source of U.S. oil and gas, is in political turmoil that is causing work stoppages in the petroleum industry.
• Regulations: U.S. clean-air rules require lower-sulfur gas that some overseas suppliers can provide. Also, refineries are shifting to summer-blend gas, which is designed to lower pollution. The switchovers can cause shortages.
A glimmer of good news: Average prices are edging down in Nevada and West Virginia, which set records earlier this week, and in Hawaii, which nearly did.
But brief shortages are occurring at gas stations in central Florida, says Tom Kloza, analyst at Oil Price Information Service, and prices there have zipped 10 cents higher in as many days. A shipping accident Feb. 21 on the lower Mississippi River interrupted Florida supplies. Kloza points out that a bigger price jump typically comes in late summer, when "I wouldn't be surprised if we blistered right through" record prices across the country.
Gas stations report big jumps in gas theft by aggravated motorists. Stations, which seldom earn even a dime a gallon, typically make less when prices rise because they cut profit margins to stay competitive.
"Drive-off gas thefts are up about 500% the past two or three weeks," says Sonja Hubbard, CEO of 358 E-Z Mart Stores based in Texarkana, Texas. "I am always amazed that the consumers we deal with every day, when it costs them another buck for their fill-up, think that's justification to steal."
The government hasn't moved to lower prices because "we haven't met the pain threshold yet," says Thomas Bentz, BNP Paribas Commodity Futures analyst. But if fuel prices slow the economy, "you'd see how quickly Washington would act."
Some lawmakers suggested Thursday that the United States quit pumping oil into the Strategic Petroleum Reserve, freeing that oil for refining into gasoline. That would shave only 1.5 to 2 cents a gallon from the price, though, says Lawrence Goldstein, president of the Petroleum Industry Research Foundation.
Source
Here is a link to Gas Price Watch if you want to find the best deal in your area.
By James R. Healey and James Cox, USA TODAY
The government amplified concern Thursday about rising gasoline prices and repeated a warning of possible shortages, but it didn't offer relief for either. "This administration is extremely concerned" about the near-record gas prices, Energy Secretary Spencer Abraham said, strengthening a department statement a day earlier that said "spikes in gasoline prices are always of concern."
Separately, the head of the department's Energy Information Administration, Guy Caruso, told a Senate panel that "many signs are pointing to a tight gasoline market this driving season," repeating the caution about possible shortages from a recent EIA analysis. Nationwide average price for a gallon of unleaded regular gas is $1.709, motorists' club AAA reported Thursday. The record was $1.737 Aug. 30 of last year.
California hit a statewide record of $2.178, AAA said, 0.1 cent higher than its previous record set last March 21. Six states were less than a penny from their highs Thursday.
Behind the increases:
• Fears of shortages. As warmer weather triggers more driving, demand for gasoline will rise from 8.8 million barrels a day now to 9.5 million by late summer. U.S. refineries can't make that much and depend on imported gas to fill the gap.
• Petro-politics: OPEC, the cartel that pumps one-third of world oil, says it will cut production April 1. Venezuela, a major source of U.S. oil and gas, is in political turmoil that is causing work stoppages in the petroleum industry.
• Regulations: U.S. clean-air rules require lower-sulfur gas that some overseas suppliers can provide. Also, refineries are shifting to summer-blend gas, which is designed to lower pollution. The switchovers can cause shortages.
A glimmer of good news: Average prices are edging down in Nevada and West Virginia, which set records earlier this week, and in Hawaii, which nearly did.
But brief shortages are occurring at gas stations in central Florida, says Tom Kloza, analyst at Oil Price Information Service, and prices there have zipped 10 cents higher in as many days. A shipping accident Feb. 21 on the lower Mississippi River interrupted Florida supplies. Kloza points out that a bigger price jump typically comes in late summer, when "I wouldn't be surprised if we blistered right through" record prices across the country.
Gas stations report big jumps in gas theft by aggravated motorists. Stations, which seldom earn even a dime a gallon, typically make less when prices rise because they cut profit margins to stay competitive.
"Drive-off gas thefts are up about 500% the past two or three weeks," says Sonja Hubbard, CEO of 358 E-Z Mart Stores based in Texarkana, Texas. "I am always amazed that the consumers we deal with every day, when it costs them another buck for their fill-up, think that's justification to steal."
The government hasn't moved to lower prices because "we haven't met the pain threshold yet," says Thomas Bentz, BNP Paribas Commodity Futures analyst. But if fuel prices slow the economy, "you'd see how quickly Washington would act."
Some lawmakers suggested Thursday that the United States quit pumping oil into the Strategic Petroleum Reserve, freeing that oil for refining into gasoline. That would shave only 1.5 to 2 cents a gallon from the price, though, says Lawrence Goldstein, president of the Petroleum Industry Research Foundation.
Source
Here is a link to Gas Price Watch if you want to find the best deal in your area.
