Watch out: Here comes $4 gasoline

Prices were supposed to peak below $3 a gallon, but refinery problems, strong demand could push them much higher.

By Steve Hargreaves, CNNMoney.com staff writer
April 26 2007: 5:59 AM EDT


NEW YORK (CNNMoney.com) -- Gasoline prices, already above $3 a gallon in some states, could charge higher this summer and hit $4 a gallon in some locations, according to one industry expert.
Pump prices were supposed to peak below $3 a gallon this May, then drop off before the summer driving season got into full swing, according to the Energy Department's price forecast.

http://money.cnn.com/2007/04/26/news...ex.htm?cnn=yes

You can thank the gas-hog drivers around you for this:

One big factor driving prices: gasoline inventories continue to fall. After a promising one-week boost in refining activity, the latest report Wednesday actually shows refining activity falling. And demand is already soaring, before the summer driving season is in full swing.

If you are thinking about a hybrid, you might want to pull the trigger now, while there are still some available.


Harry

 

Last week, an exec from Chevron said the big push for ethanol may mean no new US refineries. None have been built since the 1970's. They are the bottleneck in gas supply at this moment.

 

Did anybody not see this coming last fall when prices dropped so quickly?

http://money.cnn.com/2007/04/26/news...rss_topstories

 

And that bottleneck is not going away. Combine the difficulties of getting approvals to build a new refinery (not in my backyard!) with a penchant for Americans to continue to buy and drive SUV's and pickup trucks, and you have a recipe for high gasoline prices into the foreseeable future.

Harry

PS: I had a guy in a big Dodge Ram pickup truck yesterday feign a left-turn into me at a light. It appeared he was acting out a dislike for my fuel-efficient Prius. He started at me, knowing full well I was there, since I had my headlights on. I guess we'll have to get used to people driving gas-hogs showing resentment towards hybrids...

 

Yeah, but there are Prii on Toyota dealer lots, so that proves hybrids are no good.

Harry

 

Anybody want to bet we won't see $4 (US average) for regular this summer?

 

http://www.local6.com/news/12885910/detail.html

Orlando Motorists Pay $4 For Gallon Of Gas

http://www.ucan.org/gasoline_autos/g..._san_francisco

California gas prices continue to rise, top $4 a gallon in San Francisco

Remember last year, when we all wondered about those crazy Californians paying $3/gallon for gasoline. And then before we knew it, we were paying that much...

Harry

 

More:

http://www.iht.com/articles/2007/04/22/news/bxcom.php

CHICAGO: Whether it is $50 to fill up a Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is expected to become widespread in the United States.

Fuel prices are rising at a pace not seen since Hurricanes Katrina and Rita knocked out a third of the U.S. oil refining industry in 2005. Gasoline consumption is climbing twice as fast as last year and will accelerate when summer travel begins late next month.

"What we're surprised by is the increased demand," James Mulva, chief executive at ConocoPhillips, said recently. "Even though the price of gasoline is up, the demand is up."

Gasoline inventories, measured by the days of demand they will cover, are at the lowest level in two decades for this time of year because of refinery fires, power failures and maintenance work oil companies failed to complete in 2006. No new U.S. refinery has been built in three decades, increasing the strain on existing plants.

U.S. consumers will get little relief on gasoline prices from Europe this year, unlike 2005, when oil companies shipped more across the Atlantic after the hurricanes. Europe's gasoline inventories in February were 114.2 million barrels, down 11 percent from two years earlier, according to the International Energy Agency in Paris. The drop in Europe was almost twice the 5.7 percent decline in U.S. supplies in that time.

that from: http://www.bloomberg.com/apps/news?p...YOo&refer=news

(KDKA) PITTSBURGH A local expert is predicting gasoline in some of the hottest tourist spots in the country could top $4 a gallon before the summer driving season is through.

“We will see well over $4 a gallon in the New York and D.C. Metro areas before we get to August,” said Kent Moores of Duquesne University.

That scary prediction came from Moores during a taping of the Sunday Business Page at KDKA.

from: http://kdka.com/local/local_story_125161603.html

Harry

 

I just think it's more the media trying to draw attention to the situation before it really happens. I mean anything possible but 4 dollars will see a lot of politicians scrambling... which is why I'm betting we won't see $4/gallon.

 

Um, the refineries are behind earlier in the year than usual...that sounds like there may be some substance to it.