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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (1517)	8/6/2005 12:14:17 AM
From: Wharf Rat	Read Replies (2) \| Respond to of 24225

Gas prices surge into uncharted territory Retreat from lofty levels is unlikely, analysts say By Craig D. Rose UNION-TRIBUNE STAFF WRITER August 5, 2005 San Diego gasoline prices have moved into record territory after another price spike this week. A survey yesterday by the Utility Consumers' Action Network pegged the average price of a gallon of unleaded regular at about $2.68, well above the previous record of $2.64, set in April. Prices had hovered near the previous record for some time, with UCAN reporting $2.639 last week. But the size of the increase over the past week surprised observers. And it wasn't just motorists who saw the large increases. Truckers now face their own "pump shock," as the Automobile Club of Southern California said diesel fuel set a record in San Diego of nearly $2.83 a gallon, up 5 cents in one day according to their survey. A spokesman for the California Energy Commission said diesel prices were likely affected by the shutdown of a Los Angeles area refinery that is a major source of the fuel. But underlying the rising price of diesel and gasoline is a jittery international oil market, compounded in California by what consumer advocates describe as a industry with little oversight. The Auto Club, meanwhile, said a reduction in gasoline demand during June and part of July seems to have ended. Demand is now running 3 percent higher than last year, said Carol Thorp, a spokeswoman for the club. That makes record prices more likely. U.S. prices are about 40 cents higher than a year ago, while West Coast prices remain about 20 cents higher than other regions of the country. On an inflation-adjusted basis, gasoline prices hit an all-time high of about $2.94 in 1981 and an all-time low of about $1.23 in 1998. Michael Shames, executive director of UCAN, said it was ironic that gasoline price hikes had come after demand for gasoline had slackened in June and July and after Congress passed a new energy policy bill, which the oil industry supported and most consumer advocates opposed. "How perversely fitting it is that record prices will be reached in the week that this so-called national sweeping reform of energy policy will be signed by the president," Shames said. The advocate said California could do such things as monitor refineries to be sure shutdowns are legitimate, track exports of gasoline and impose a tax on high refinery profits with the proceeds used to subsidize fuel conservation. He said Gov. Arnold Schwarzenegger was doing little to restrain gasoline prices. Claudia Chandler, a spokeswoman for Schwarzenegger, said the governor had pressed Congress to double auto fuel efficiency standards and to encourage the purchase of hybrid autos, which generally get better mileage in city driving. In addition, Chandler said Schwarzenegger supported a state gasoline conservation program and sought to encourage the development of alternative motor fuels. Worldwide oil markets yesterday sent signals that further gasoline price records could be ahead. Oil prices rose as traders remained wary over possible supply woes because of refinery shutdowns, and forecasters predicted a busy hurricane season that could hurt Gulf of Mexico output. Light, sweet crude for September delivery rose 52 cents to settle at $61.38 a barrel on the New York Mercantile Exchange. Gasoline rose 3.14 cents to $1.8023 a gallon while heating oil rose marginally to $1.7078 a gallon. "Years of underinvestment in the refinery sector have led to a very tightly supplied market, which in return pushed prices to current levels," said Alex Scott, a senior research analyst at Seven Investment Management in London. "Direct market participants seem to believe that prices are to stay at current levels for years to come." He added that there was little evidence of a slowdown in global demand, which tended to support the traders' view. Prices had reached a record intraday high of $62.50 Wednesday before retreating to settle at $60.86 after the U.S. Department of Energy released its better-than-expected petroleum report, which showed an increase in oil inventories for the first time in a month. Production suspensions at several key U.S. plants was the catalyst for a price spike last week as analysts said the snags could hurt oil products supply and fail to meet demand in an extremely tight market. At least four plants, including the third-largest refinery in the country, were shut down from late last week either from fires or unscheduled maintenance. Oil markets have been roiled in recent days over the death of King Fahd in Saudi Arabia, weather patterns that could hurt Gulf of Mexico output down the line and Iran's nuclear ambitions, which could raise tension between OPEC's No. 2 producer and the West. The U.S. Weather Service has predicted 11 to 14 more tropical storms, including seven to nine more hurricanes, by the end of November. -------------------------------------------------------------------------------- signonsandiego.com