Don't expect relief at the gas pump any time soon.
Although oil prices remained steady Monday, gas prices may not dip until summer, an analyst predicted.
|Gas prices have soared a record 12 cents per gallon in the past two weeks.|
The crude oil crunch has sent gasoline prices soaring a record 12 cents per gallon in the past two weeks. The average retail price of gasoline nationwide, including all grades and taxes, was about $1.59 per gallon on Friday, up 11.99 cents from Feb. 25, according to the Lundberg Survey of 10,000 stations.
"The word 'increase' kind of pales," analyst Trilby Lundberg said.
The costliest gas premium at full-service stations was flirting with the $2-per-gallon benchmark.
On Monday, dealers awaited fresh signals from OPEC on its intentions for output policy when an agreement on supply curbs expires at the end of the month.
Traders want to know exactly how much extra supply OPEC and
its leading non-OPEC ally Mexico have in mind but officials at
producing countries say negotiations still have reached no
Oil traders said they expected OPEC to raise production by
less than what many analysts estimated is needed
to return the oil market to equilibrium.
Dealers said growing concern over a summer shortage of
petrol in the United States, which accounts for 40 percent of
gasoline consumption, was holding prices high despite the
expectations of an OPEC output increase.
OPEC President Abdullah al-Attiyah in television remarks
released in the United States Friday said that Washington was
seeking a 2.5 million barrels-per-day (bpd) increase in OPEC
production when the cartel meets in Vienna from March 27.
The International Energy Agency said Friday that OPEC needed
to raise production by 2.3 million bpd in order to replenish
inventories to normal levels.
Consumers Should Take Some Comfort
Despite the high prices, consumers should take some comfort when considering the average overall price is still lower than the record set two decades ago.
"The true high was June 1980, with $2.66 for all grades combined using today's dollars," Lundberg said.
"It's more than a dollar lower in real terms. But in terms of speed, this is a true record-breaker," Lundberg added. "The rate of increase 6 cents per week per gallon nationwide has never been seen before."
Prices were higher in the West, where gasoline has been in shorter supply because of refinery problems last year.
San Francisco had the highest price for self-service regular, the most-purchased type of gas, at an average of $1.83 per gallon. That was up 21 cents in two weeks.
Cheyenne, Wyo., had the bottom price, at about $1.39 per gallon.
The high price of crude oil and short supply are driving all increases.
The International Energy Agency reported last week that the United States and the world's other richest countries have depleted their oil inventories to the lowest levels in four years.
The IEA's David Knapp said there is a shortfall in global petroleum supplies of about 2.5 million barrels per day.
The Organization of Petroleum Exporting Countries is worried about the recent price volatility, and analysts now expect the group to ease some of the production cuts that it made in 1998 and 1999.
However, Lundberg warned, don't look for an immediate dip in gas prices, because demand will be rising due to warmer weather and the start of the spring driving season.
"Even if the outcome of the March 27 OPEC meeting brings more oil supplies to the market, U.S. gasoline prices may hover around current levels or rise" in the next few weeks, she said.
Prices at self-service stations averaged $1.5450 for regular unleaded gasoline, $1.6385 for mid-grade and $1.7234 for premium. Full-service prices were $1.8211 for regular, $1.9064 for mid-grade and $1.9835 for premium.
The Associated Press and Reuters contributed to this report