Posted on 04/03/2005 6:16:32 PM PDT by BulletBobCo
NEW YORK (Reuters) - Regular gasoline pump prices in the United States may average as high as $2.50 by Memorial Day, shattering the records as futures prices climb to new peaks, analysts said on Friday.
U.S. retail gasoline is already running above $2.15 a gallon, well beyond last spring's peak of $2.05, according to government and industry surveys.
"Surging NYMEX futures are certainly an upward pressure on prices at the pump, so I would certainly expect to see retail prices move up sharply over the next few weeks," said Tim Evans, analyst with IFR Energy Services.
Gasoline futures on the New York Mercantile Exchange (NYMEX) hit a record Friday over $1.70 a gallon, keeping stride with a spike in the cost of crude as soaring global energy demand threatens to outpace supply.
While it is difficult to predict pump prices based on futures traded on the NYMEX, the increase will probably get passed on to motorists, with prices running up to $2.50 a gallon in the next month, said Ed Silliere, analyst with Energy Merchant Intermarket Futures.
The U.S. Energy Information Administration uses spot -- physical -- prices to predict retail prices, and the NYMEX is the benchmark off which spot prices are calculated, said Mike Burdette, analyst with the EIA.
U.S. average retail prices generally are 60 cents to 65 cents higher than spot prices, which on Friday were running about $1.70 a gallon in the U.S. Gulf Coast.
Friday's spot prices, Burdette said, would predict average retail gasoline prices of $2.30 to $2.35 per gallon, but only if the spot price stays put for at least several days.
CALIFORNIA TAKES THE BRUNT
Pump prices in California on Friday were 30 cents higher than the national average, according to the AAA's survey, and further spikes could send prices close to $3.
California tends to have higher prices than other states because of more stringent environmental rules governing fuel that out-of-state refiners have trouble meeting.
While soaring prices have yet to show an impact on fuel demand in the United States, that could be coming soon, IFR's Evans said. He pointed to the third quarter of 2004, when high gasoline prices helped lower year-on-year demand growth to 0.4 percent, less than the rate of population growth.
Current gasoline demand is running about 2 percent higher than last year, according to government figures.
EARLY SPIKE?
Evans said that if 2005 plays out like last year, the record high prices could hit before peak summer driving demand kicks in, and ease by July.
"Overall, I think that means we could see retail gasoline prices rise to the $2.30-2.40 level on a nationwide average, but that they would fall back to less than $2.00 by the 4th of July," Evans said.
The NYMEX front-month, for deliveries to the New York Harbor in May, settled on Friday at $1.7310 a gallon, and hit a record high of $1.7360 a gallon, with June delivery futures striking a record $1.75.
Already 2.30 in south eastern Wisconsin and northeastern Illinois.
It seems to me, the more the media talks about how high the price of gas might be going up, the more it does go up. Just an observation!
Anywhere from $15 to $25 in the price of oil is caused by speculators.
$2.49 a couple of days ago out here in the boondocks.
Last time I was in SoCal, we drove up the 101 to Goleta. On the way up, I was struck by all the oil derricks we could see offshore. I find ironic they are paying the highest prices. Years of liberal control...
Bread is more expensive than ever.
Grass seed is more expensive than ever.
Clothes are more expensive than ever.
Everything is more expensive than ever.
And every day that oil/gas gets more expensive its a "new record high" an endless supply of headlines for us.
Buy Oil stocks.
indeed. and the administration is totally detached on this issue, they will do nothing to challenge what is going on, and the president's approval rating will fall as pump prices go up.
Speculators cannot really affect price in the long run.
They add to demand by buying oil to sell later. This drives the prices up.
They think the price will be higher in the future. But if they buy now based on this belief, that makes the price now higher, and the price in the future lower.
So they're just smoothing out the curve.
Prices in NJ are around $1.99 a gallon for regular.
In Pennsy across the river it's about $2.19.
Unless prices spike much higher, I don't envision people going bankrupt over the latest surge of price spikes, especially if they begin to moderate and go down as drillers get more out of the ground.
OTOH, If the timeframe was the weeks leading up to the election, the Media would be trumpeting (and tromboning and tuba-ing) fuel prices to a feverish pitch to help the Death'o'Rats.
Aside from the toll in fuel taken by CNN's need to fly Anderson Cooper around the world six times a week, the answer is no.
Yesterday, I got nailed for $2.44/gallon here in Las Vegas.
$2.18 today in central Michigan
My mind was blown today when, in the heart of Houston, I saw prices for regular range from $2.02 to $2.15. No matter how you slice it, this is BAD news for Bush.
I don't believe that any of the off-shore oil is refined for gas, it's too heavy, and full of sulfer, I sure someone will correct me if I am wrong. more of the oil is shipped in, ther is a terminal just off LA harbor.
Wait a minute all the poor illegal aliens can't afford the increase....
What do you mean "Bad news for Bush"? What does Bush have to do with any of this?
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