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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (20021)	3/10/2003 6:12:04 PM
From: Tomas	Respond to of 206121

ConocoPhillips Chairman Sees Summer Gasoline Shortage By Jeff Green Detroit, March 10 (Bloomberg) -- ConocoPhillips Chairman Archie Dunham, whose company has the largest U.S. oil-refining business, said a shortage of gasoline will keep pump prices high during the peak period for demand. ``There will be a shortage of gasoline in the summer driving season,'' Dunham said in an interview. The nationwide average for regular-grade gasoline was $1.712 a gallon in the week ended today, up 26 percent since December, normally a time when prices are low, government figures showed. The U.S. Energy Department last week forecast a record price of $1.76 for April because of high oil costs and low inventories. Oil has surged 54 percent in the past year to $47.47 a barrel. Even if oil falls, gasoline will remain high because unusually cold weather in recent months has forced refiners to make more heating fuels to keep pace with demand from utilities, Dunham said today before a speech to the Detroit Economic Club. By this time of the year, refiners have usually switched from making heating oil to making more gasoline. This year, that conversion has been delayed until probably April because of the cold weather, Dunham said. The shortage of gasoline is compounded by the surge in natural-gas prices, he said. Some utilities that use natural gas to run their power plants are switching to fuel oil instead, Dunham said. Some generators can run on either fuel. Natural-gas prices have more than doubled to $6.615 per million British thermal units and rose close to $12 last month. Short of Natural-Gas ``We are desperately short of natural gas in the lower 48'' states, Dunham said. ``I think we're going to see gasoline prices continue to rise in the second and third quarter.'' Higher prices for gasoline are good news for U.S. refiners, which had their worst year in a decade in 2002, Dunham said. ``Refiners, especially the small- and medium-sized refiners, are going to be working hard to maintain gasoline prices at current levels even after crude prices fall because they had such poor profitability last year,'' Dunham said. ``They are going to try and put more cash on the balance sheet.'' More investments must be made in exploration to find new sources of gas in the Gulf of Mexico, Canada and Alaska, Dunham said. Prices would need to be $3.50 to $4 to encourage new drilling, he said.