Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Wharf Rat who wrote (2399)	10/6/2005 10:43:52 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24225

Experts differ on future of gas prices in country [published on Wed, Oct 5, 2005] BLOOMBERG NEWS Gasoline prices might fall as the shock of $3 a gallon at the pump prompts U.S. motorists to drive less. Demand for gasoline in the four weeks that ended Sept. 23 was 2.8 percent below a year earlier, the Energy Department said. The data show that Hurricanes Katrina and Rita are interrupting growth in fuel consumption for the first time since Sept. 11, 2001. Benchmark gasoline futures have declined four sessions in a row in New York amid speculation demand might be eroding. The U.S. average pump price has yet to fall much. It was $2.93 a gallon as of Monday, according to the Energy Department, 14 cents below the all-time high. "We're going to see prices move lower," said Peter Beutel, an energy consultant and president of Cameron Hanover Inc. "We've already hit this economy with a huge, huge shock," he said, predicting the economic blow will translate into lower gasoline consumption. However, those forecasts are not echoed by Luis Giusti of the Centre for Global Energy Studies. He said prices could reach $4 a gallon by the end of the year as hurricane-damaged refineries stay shut and imports from Europe wane. "Pressure on gasoline prices is going to continue because there's no solution in sight" to refining, Giusti said. "We're not even feeling it yet because imports from Europe moved immediately after the refineries were closed. That relief will pass." Katrina and Rita idled as much as 29 percent of U.S. refining capacity, cutting gasoline stockpiles to less than 23 days of consumption, close to the all-time low in 2003. About 19 percent of the nation's refining capacity remains closed. President Bush last week said Americans need to drive less and become "better conservers of energy." The government will air radio spots with tips on how drivers can conserve, along with energy-saving advice for homeowners, U.S. Energy Secretary Bodman said. Charles Maxwell, a senior energy analyst at Weeden & Co., said conservation, whether prompted by public service announcements or pump prices, might not bring supply and demand back in balance longer term. "We are running into an energy crisis," he said. "We have had four recessions as a result of the last four energy crises." Crude oil prices are lower than they were when Katrina came through the Gulf at the end of August. Crude oil for November delivery fell $1.57 to $63.90 a barrel. Crude touched a record $70.85 on Aug. 30 in New York. "I believe there is room for price movement to the downside," Bodman said. "Ultimately gasoline will trade as crude oil will trade." Still, Bodman said that much will depend "on when the refineries get up." No new refineries have been built in the U.S. in almost three decades. Strains in refining capacity, exacerbated by hurricane damage, prompted Bush to say Tuesday that said energy supplies are "tight" and more refineries are needed. "There are signals that people are changing their perception about building new refineries," said Giusti at the London-based CGES, a consulting company founded and chaired by former Saudi Arabian Oil Minister Sheikh Ahmad Zaki Yamani. "If you want a grass-roots refinery, it will take four or five years" to build. Demand for gasoline in the U.S. has increased steadily for the past 15 to 20 years, said Tom Bentz, an oil trader with BNP Paribas. "In the last five years it's grown even more because of the American consumer buying SUVs," he said. Rising fuel consumption pushed gasoline to all-time highs even before the storms. Retail gasoline prices rose almost 50 percent from the start of the year through mid-August. "For a long time everyone's been waiting for when the high energy prices would affect the economy," Bentz said. "Maybe we're finally seeing it now." In the short term "conservation is the only answer" as consumers, politicians and oil companies seek to close the gap between supply and demand, said Dr. Charles Mankin, director of the University of Oklahoma's Sarkeys Energy Center. "We don't have any other options," he said. nwherald.com