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To: Glenn D. Rudolph who wrote (4352)	5/15/1998 7:31:00 AM
From: Glenn D. Rudolph	Respond to of 164684

****OT***** Gasoline prices a bargain for summer drivers Reuters Story - May 14, 1998 22:38 %US %LEI %PROD %NEWS CHV ARC V%REUTER P%RTR By David Brinkerhoff LOS ANGELES, May 14 (Reuters) - Summertime and the driving is easy. American motorists are headed into the summer vacation season with gasoline a bargain and prices forecast to stay at historic lows, the government and consumer groups forecast this week. Those forecasts comes as record numbers of Americans plan to kick off their summer vacations later this month, traditionally the period of heaviest gasoline demand in the United States. "Average gasoline prices ... are expected to be about a dime per gallon below last summer's average," the U.S. Energy Department reported in its April forecast. When adjusted for inflation, motorists will pay the lowest gasoline prices ever for a summer, the agency projected. The average price of regular self-serve unleaded gasoline was $1.098 a gallon nationwide in early May, or nearly 15 cents below year-ago prices, according to America's leading auto club, the American Automobile Association. Despite a 2 cent price jump so far in May, prices will stay well below the $1.29-a-gallon peak reached last summer, said AAA spokesman Mike Morrissey, whose organization has 40 million members. "They're going up but they're not expected to be as high as last summer," Morrissey said. "That, combined with a strong economy, makes it a great year to travel." Larger supplies of gasoline and cheap oil prices are driving down retail prices, which fell for seven straight months before the start of May. Crude oil prices on the New York Mercantile Exchange dropped more than $8 a barrel, or 40 percent, from October to March as world oversupply and weak demand from Asia and the United States this winter put a damper on the market. Crude stockpiles rose 6 percent in early May, as refiners prepared for record demand with more motorists than ever expected to pile in their cars and head for the beach. "You'd expect prices to trend up a few cents in the next few weeks," Chevron Corp. national price manager James Huccaby said. Higher prices have critics of big oil seeing red rather than summer's blue skies. Crude oil's collapse should push down the price, regardless of demand, said Charles Langley, publisher of a consumer newsletter in San Diego. "There's no logical market reason for the price increase and if these boys were really competing ... the price would be dropping to reflect the cost of production," Langley said. Motorist demand is expected to rise from 3 percent to 5 percent this year as higher incomes and a strong economy encourage more Americans to hit the road. Supplies are expected to be more than adequate. Already, the nation's refiners are operating near full capacity, and net gasoline imports are projected to jump nearly 54 percent. But some motorists in California, which has the nation's highest gasoline prices, were not as optimistic as the experts. "Every year it's the same ... it's going up," said German Hernandez, 39, who was pumping $1.16-a-gallon of regular unleaded gasoline at an ARCO gas station in west Los Angeles. Just up the street, Steve Calverley, 31, and his co-worker were filling up their delivery truck for $1.23 a gallon. "It should go back down to what it was. It was 99 cents for a while," Calverley, a driver for a flooring company, said. "Stop ripping us off," he snapped.