Gas Prices Slip, but Could Hit $4

[edjr 5,617]

NEW YORK (AP) -- Retail gasoline prices pulled back slightly from record levels Tuesday and gave some consumers a small break, but a new government forecast said gas could reach as high as $4 a gallon during the summer driving season.

 

Oil futures prices, meanwhile, fell as the dollar stabilized, giving investors an opportunity to lock in profits from crude's recent rally. Limiting the declines were developments in Iran, which announced plans to expand its uranium enrichment program and said it has tested key equipment, a move that raised the market's concerns about political conflict that could affect the country's oil exports.

 

In its monthly report on petroleum supplies and demand, the Energy Department's Energy Information Administration forecast that monthly average pump prices will peak near $3.60 a gallon in June, but could rise as high as $4 a gallon at times. That's a dime higher than the EIA's previous monthly average projection, and brings government forecasts closer to those of many analysts who expect gas prices to peak close to $4 a gallon.

 

The government also predicted high prices will cut demand for gasoline at the height of the summer. Gas consumption will fall by about 0.4 percent during the peak summer months, and overall consumption of petroleum products will drop by 90,000 barrels a day this year, the EIA said. The agency previously said petroleum consumption would rise by 40,000 barrels a day.

 

High prices are already having an impact on demand, which has fallen since January.

 

On Tuesday, regular unleaded gas prices slipped slightly to a national average of $3.331 a gallon from Monday's record of $3.339, according to AAA and the Oil Price Information Service. Prices are 55 cents higher than a year ago.

 

Crude oil's rise above $100 earlier this year is the main reason gas prices have been rising. Crude futures rose to a trading record of $111.80 last month, and have since traded in a range between about $100 and $110.

 

On Tuesday, light, sweet crude for May delivery fell 59 cents to settle at $108.50 a barrel on the New York Mercantile Exchange, but alternated between gains and losses. The dollar stabilized against the euro Tuesday, making oil less effective as a hedge against inflation. That led some investors to take profits from a rally that's added 8 percent to the price of a barrel of crude in a week. Analysts believe the dollar's long decline fed the investment surge that pushed oil above $100 earlier this year.

 

However, the declines were limited by concerns about Iran's announcement that it has begun installing and testing equipment at a uranium enrichment plant. The U.N. Security Council has already passed sanctions against Iran for expanding its nuclear program, and the market is concerned that an escalation of tensions could affect oil exports from the Middle East.

 

"The announcement of the (equipment) there I think makes people a little bit nervous," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Amherst, Mass.

 

Many analysts expect oil prices to rise higher in coming months, possibly above last month's records, as the Federal Reserve cuts interest rates later in the year. Lower rates tend to weaken the dollar. Minutes of the Fed's March meeting, released Tuesday afternoon, showed policymakers were far from unified in their decision to cut the key federal funds rate by three-quarters of a percentage point, but are worried about the severity of the economic slowdown.

 

High oil prices have also sent diesel prices higher. Diesel's national average price rose 1.3 cents to $4.02 a gallon on Tuesday, AAA said, within 2 cents of last month's record.

 

"We'll set a new record this week -- probably in the $4.05 to $4.10 a gallon neighborhood," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

 

Diesel fuel is used to transport most of the world's food, industrial and consumer products, and is one of the reason food prices have risen so sharply this year.

 

In other Nymex trading Tuesday, May heating oil futures rose 2.59 cents to settle at $3.1102 a gallon. Analysts said heating oil prices are being pushed higher by strong global demand for diesel, which is closely related to heating oil, and a fire that shuttered a refinery in Finland.

 

May gasoline futures fell 3.31 cents to settle at $2.7504 a gallon, and May natural gas futures fell 9.4 cents to settle at $9.697 per 1,000 cubic feet.

 

In London, May Brent crude fell 80 cents to settle at $106.34 a barrel on the ICE Futures exchange.

 

We all knew it was coming. They've already made it so we're happy to pay 3.00 a gallon, this summer they will have us happy we're only paying 4.00 a gallon.

 

The government forecasts it will hit 4, but does nothing about it?

 

3.11 for a gallon of heating oil? it was 99 cents 3 years ago.

[Bert 1,099]

We all knew it was coming. They've already made it so we're happy to pay 3.00 a gallon, this summer they will have us happy we're only paying 4.00 a gallon.

 

The government forecasts it will hit 4, but does nothing about it?

 

3.11 for a gallon of heating oil? it was 99 cents 3 years ago.

 

You northern folks keep sucking up the heating oil and natural gas and us southern folks will keep selling you more.

[kpbuckeye 2]

51 dollars to fill up this morning

[dain11279 930]

It's getting absolutely ridiculous. It cost me $42 to fill my tank the other day and I drive a compact car. My buddy owns a pick-up and it almost cost him $100 to fill his up. $100!! I'm walking everywhere this summer.

[edjr 5,617]

You northern folks keep sucking up the heating oil and natural gas and us southern folks will keep selling you more.

 

What's it like walking and riding a bike everywhere? also is the electricity free?

[NorthernVike 2,080]

You northern folks keep sucking up the heating oil and natural gas and us southern folks will keep sleeping with our own family members.

 

 

[Bert 1,099]

What's it like walking and riding a bike everywhere? also is the electricity free?

 

No you don't understand. Gas and fuel prices are only slightly less than what you pay but the stock price, dividends and year end bonuses are through the roof.

 

Any time I need an ice cold beer full of glass I'll give you folks in Boston a call.

[dain11279 930]

 

[Blitzen 0]

I think you guys should nationalize your oil companies and then set a price ceiling just like unbridled capitalism suggests. Oh wait is that unbridled socialism? I forget.

 

Logical follow-up to basically nationalizing the banks.

[BudBro 123]

I think you guys should nationalize your oil companies and then set a price ceiling just like unbridled capitalism suggests. Oh wait is that unbridled socialism? I forget.

 

Logical follow-up to basically nationalizing the banks.

 

this is where the rhetoric is taking us. here's how it works. we parade the oil execs in front of the pork barrel takers of congress and flog them with uninformed questions and banter regarding profits while prices rise. all the while, not telling the public that these huge profits are prior to expenses, as is the way oil companies must declare earnings. then, as prices continue to rise and begin to affect the little people, some begin to suggest that the govt should take over the industry and nationalize energy, and the little people get on board because in the short term they will pay less for fuel (see national healthcare as uniformed example). for what is the real goal...he who controls the energy controls the masses. the govt wants control of the oil industry (except for bush and cheney, cause they like oil as is stated so profusely by the bush haters on this bored).

 

there is as much oil in alaska as there is in saudi arabia...read about gull island. jimmy carter intentionally kept this country from being energy independent when he dealt with gull island. along with the capped oil wells in the rockies, we have enough oil for the next 300 years. also, there is enough natural gas in alaska to supply us for another 100 years. there is also a pipeline already in place where another could be made for the gas, and could be online in 6 months. where are the truthers when there is actually a legitimate gripe? they want to blame the govt for 9/11, but won't blame the same govt for needlessly high energy prices.

 

think back over the past few years at the various energy crises...heating oil prices in the northeast, electric prices and concerns in the west, farm energy prices in the corn belt a few years ago...they move the crisis from place to place to find breaking points. then, all of a sudden, the crisis disappears. hmmm, where did the energy suddenly come from that caused the price adjustment? we're being tested for a breaking point right now and if we don't all raise helll about it and let them know we've passed it, it will just trend higher. then, you'll all biitch that the govt should take over exxon or whomever, and the deal will be sealed...along with your fate. hugo chavez will be laughing at us as he rolls over in his grave (hopefully soon).

[aportanenko 0]

4 dollars, 6 dollars, the pain is past unbearable, just keep spreading those cheeks America. just like that wh0re at the truck station, numb to the pounding she takes every day. That reminds me, Mother's Day is coming up.