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[IP] Gas prices accelerating as pump pressures rise -- Regular = $2.39 in LA





Begin forwarded message:

From: "John F. McMullen" <observer@xxxxxxxxxxx>
Date: October 16, 2004 11:43:09 AM GMT+01:00
To: johnmac's living room <johnmacsgroup@xxxxxxxxxxxxxxx>
Cc: OSINT Discussion Group <discuss-osint@xxxxxxxxxxxxxxx>, Dave Farber <farber@xxxxxxxxxxxxx>, Inwood2001 <inwood2001@xxxxxxxxxxxxxxx>, CardinalFarley List <CardinalFarley@xxxxxxxxxxxxxxx> Subject: Gas prices accelerating as pump pressures rise -- Regular = $2.39 in LA

From the Los Angeles Daily News -- http://www.dailynews.com/Stories/0,1413,200~20954~2471260,00.html

Gas prices accelerating as pump pressures rise
By Brent Hopkins

Gasoline prices hit a record high in Los Angeles on Friday, crossing $2.391 for a gallon of regular unleaded and apparently headed a lot higher with no top in sight. Pump prices are more than 54 cents above their mark at the same time last year, with the Automobile Club of Southern California reporting that 21 of 25 metropolitan areas in the state have broken records. Diesel prices have similarly shot up to $2.455 locally, nearing the record of $2.506 set in May.

The major driver in the fuel hikes is the soaring price of a barrel of crude oil, which closed Friday at a record $54.93 on the New York Mercantile Exchange.

Factors ranging from hurricane damage in the Gulf Coast to labor unrest in Nigeria and Scandinavia have pushed oil to what was once-unthinkable levels. But there are signs markets are calming although any bad news could push it higher still.

"What else is there to say but ouch?" said Auto Club spokesman Jeff Spring. "Motorists should expect to see prices going up for at least another week, as painful as that thought is."

Federal Reserve Chairman Alan Greenspan delivered a slightly more upbeat pronouncement that current highs wouldn't hurt the economy as badly as 1970s spikes. High prices, he said, would cause more energy exploration and increase demand for fuel efficiency.

But while his tone reassured the investment community, oil experts said there was no hope for immediate relief. Retail prices have caught up to the previous jumps in the oil and wholesale gasoline markets, making them at least temporarily immune to big hikes. While prices could be nearing their ceiling, no one suggests big drops are on the way, only a halt in increases.

"I think you're peaking on the West Coast," said Tom Kloza, chief oil market analyst for the Oil Price Information Service. "You could see some trickle up in the next few days, but don't look at what's happened in the last few weeks and think I'll be paying $2.60 by Election Day."

With prices fired by crude-oil increases, consumers have fewer options than they have during past spikes, which were prompted by shortages. Noting that demand slackened over the summer, Rayola Dougher, senior policy analyst for the American Petroleum Institute, said drivers could only cut back on consumption so far.

"When's it going to end? Where's the limit?" she said. "Product prices are going to move right along with it until there's some break in crude. Every dollar it goes up, there's going to be another 2.5 cents at the pump."

The seemingly endless string of catastrophes, from major damage wrought by Hurricane Ivan to relatively minor incidents in Mexico, that drove crude to its current peak caught analysts off-guard. Though most cautiously predict that prices should slack off, no one's sticking to their forecasts too tightly.

"The next few weeks are the toughest, but it should settle down after that," Spring said. "Should . Then again, we've been saying that for four weeks now ..."

---
Brent Hopkins, (818) 713-3738 brent.hopkins@xxxxxxxxxxxxx

Copyright  2004 Los Angeles Daily News
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