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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (49361)	4/7/2006 1:23:27 PM
From: Chispas	Read Replies (1) \| Respond to of 116555

Yikes, gasoline was up 14 cents higher in Ft. Worth today ! There are three reasons gasoline prices are climbing toward record-high territory -- the price of crude oil, government rules and U.S. drivers drive more. The first is the price of crude oil, which in early trading Friday was just $3 off its record of $69.91 per barrel -- largely on geopolitical fears about Iran and Nigeria. The second is the government`s requirement that gasoline refiners stop using MTBE, or methyl tertiary butyl ether, that adds octane and cuts pollution. Refiners invested heavily in MTBE production facilities 20 years ago when Washington virtually required it. But MTBE has been found in drinking water and the politically connected ethanol industry is successfully pushing their product as a MTBE substitute. ..................... news.monstersandcritics.com Costs entailed in switching gasoline-making facilities from MTBE to ethanol is straining the system -- and sending ethanol prices sky high. Further, ethanol carries an import tariff of 54 cents a gallon as well as an ad valorem tax of 2.5 percent. The third reason is that U.S. drivers are on the road more. The country is generally prosperous, spring break and Easter are just around the corner and demand will only go up in the next few months as summer vacations add to the increasing demand.