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Energy experts predict more gas price increases

Auto association warns of short supplies during summer driving season

BY H. JOSEF HEBERT Associated Press

WASHINGTON: Already facing sticker shock at the gas pumps, motorists likely will experience more price jolts this spring and summer, energy experts said yesterday. With crude oil prices high and supplies low, refiners are not producing as much gasoline as normal, a recipe for costlier fill-ups in the months ahead.

``There's going to be some finger-pointing if we enter the summer with $2-a-gallon gasoline,'' predicted Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee.

While heating oil prices are beginning to ease, the Energy Department said similar price spikes could flare in the summer, a heavy driving time, and the American Automobile Association warned of possible short supplies then.

Many motorists are paying nearly $1.50 a gallon and even $2 for regular gasoline, according to various studies. The national average this week was $1.41, a nickel higher than the week earlier.

``We will likely see even higher prices this spring,'' John Cook, petroleum director at the Energy Information Administration, testified.

Cook said low inventories of crude oil and heating and diesel stocks, combined with soaring crude prices, led to the extremely sharp and sudden price increases in heating oil in late January and early February.

The low inventories and a reluctance by refiners to buy crude at high prices set the stage for the price of heating oil to double in parts of the Northeast when the weather suddenly turned cold.

Now a similar scenario seems to be developing on the gasoline front that could lead to severe price increases, especially if there is great demand, energy experts said.

Both gasoline and petroleum stocks are low, said Cook, adding that refiners will have to increase gasoline production significantly to meet high summer demand.

``With very little crude oil or gasoline in inventory, refiners will be purchasing crude oil in a market short on supplies'' and that means higher prices, he said.

As of this week, gasoline stocks stood at 197 million barrels, compared with 229 million barrels a year ago, according to the Energy Department. Crude oil stocks were at 286 million barrels, 50 million fewer barrels than a year ago and well below historic levels.

At the same time, refineries, squeezed by the high crude prices, are far from maximum capacity, according to government monitors.

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-- Dee (T1Colt556@aol.com), February 25, 2000

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I don't know whether to say " great post, Dee" or "AAAAggghhhhhh".

-- lyn (lynhettler@hotmail.com), February 25, 2000.