Relief at pumps unlikely through summer : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Relief at pumps unlikely through summer Wednesday, February 16, 2000


NEW YORK -- Analysts expect Organization of Petroleum Exporting Countries (OPEC) ministers to boost oil production next month, easing a world shortage. But any increase is unlikely to push down gasoline prices -- now averaging $1.41 a gallon in the United States and $1.33 in Utah -- in time for the summer travel season.

There just isn't enough time to supply refineries with enough oil to bring prices down quickly.

Unhappy with what they are paying at the pump, Americans are already talking about curtailing their driving just as resorts and other vacation spots are starting to gear up for summer.

In Salt Lake City on Tuesday, AAA Utah reported gasoline prices in the state abruptly ended a four-month slide by rising 3 cents a gallon to a statewide average of $1.33 since mid- January.

Salt Lake drivers are paying $1.36 on average for a gallon of unleaded regular gasoline. The cost is $1.29 a gallon in Ogden and $1.31 a gallon in Provo.

Nationwide, gasoline prices have been rising steadily since last March, when OPEC cut crude-oil production by 7.5 percent, or more than 2 million barrels a day, to try to boost prices that had fallen to 12-year lows.

Fears that gas prices will go even higher were raised Monday when the price of crude-oil futures closed at $30.25 a barrel -- topping $30 for the first time in nine years. The price of crude for delivery in March rose further in early trading Tuesday on the New York Mercantile Exchange, but eased later and settled down at $30.06 a barrel.

Analysts believe OPEC will come under increasing pressure -- especially from industrialized nations such as the United States -- to raise production at its next meeting in late March.

Roger Diwan, managing director for global oil markets at The Petroleum Finance Co. in Wash- ington, expects OPEC will increase oil production 1.5 million to 1.7 million barrels a day. But because inventories at refineries already are low, "that won't be enough to bring prices down dramatically and change the gas outlook in the United States."

He suggests "people better get ready" for national gas prices averaging $1.60 a gallon before they begin easing.

-- Homer Beanfang (, February 16, 2000


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