How High Will Gas Prices Rise This Summer?

The Wall Street Journal ^ | May 2, 2007 | ANA CAMPOY

[MinorityRepublican]

Rising gasoline prices already are pinching sales of gas-guzzlers like sport-utility vehicles and putting consumers in a sour mood. High gas prices in particular affect working-class shoppers, and they're a big reason why sales growth at Wal-Mart Stores Inc. has been anemic in recent months.

Some more-affluent consumers are changing their habits as well. Omar Galicia, a Dallas attorney, says he is driving less during weekends because of high gas prices. If prices keep going up, he says he'll trade in his Dodge Charger for a more fuel-efficient car. "I don't have that long of a commute, but it impacts your wallet," he says.

Pain at the pump hasn't kept Americans from driving, which is why reason gasoline prices keep rising. Many workers need to drive to earn a living, and cutting back isn't an option.

"I've been trying to find a job that is closer to home to save some gasoline, but sometimes it's difficult because the work is all over the place," says Jariel Herrera, a 32-year-old granite and marble installer in Dallas. "My job is to go from one place to the other. I can't not drive."

Latest Energy Information Agency data show gasoline demand in the past few weeks rose 2.3% from the same period last year, outstripping growth in refinery capacity. That, in turn, is making the U.S. ever more dependent on gasoline imports.

Regular gasoline nationally averaged $2.97 a gallon, AAA reported yesterday. While that's still about nine cents shy of the highest price recorded, which was in September 2005, it is record high this early in the season. Gas was selling for just $2.70 a gallon as recently as the beginning of April.

How high prices go this summer depends largely on what happens to the refineries that crank out the nation's fuel.

[al baby]

4.25

[AlaskaErik]

I guess I should consider myself fortunate that I only use 12 gallons a month driving to and from work.

[volunbeer]

It ain’t going to be pretty but whatever supply and demand dictates is going to be it.

What really kills me is the MSM rarely points out the governments profits per gallon of gas (more than the gas companies I believe) and it’s pain at the pump.

I live in Washington state and they are running surpluses but our democrat governor refused to roll back the new gas taxes. Add in the special blend required to make lawmakers feel more green and it’s a recipe for some of the highest prices in the country.

I can’t wait for the technology to arise that reduces our dependence on oil. I will enjoy my V8 until then.

[jdm]

That’s probably about right - somewhere between $3.50 and $4.25 / gallon (speaking of the Midwest).

[Danette]

Not only gas prices, but propane. Just got a pre-buy notification to buy now for next winter because prices will probably go up because of oil prices on the rise. So, will go pre-buy at 1.55 for 500 gallons. Also, just think if another hurricane hits..........

[2ndDivisionVet]

Switch to an old diesel like my Mercedes Benz 300D and use recycled restaurant vegetable oil to run your car at about $1 a gallon. http://www.theautochannel.com/news/2007/03/12/040094.html

http://veggiepower.net

http://www.vegcar.net

[Caipirabob]

I can’t wait for the technology to arise that reduces our dependence on oil. I will enjoy my V8 until then.

When that happens, you'll be able to enjoy your V8 a lot more for less. Gas won't go away, just the demand.

Yet I suspect a lot of folks will find that they can't walk away from their V8s.

At least until some liberal outlaws them.

[Waco]

How big of a recession do you want?

[Alberta's Child]

I disagree with you. "Peak oil" is being thoroughly debunked even as we speak.

The rise in gas prices is directly linked to two things: 1) seasonal changes at refineries, and 2) rising oil prices due to the weakness of the U.S. dollar. It's really that simple.

[excalibur1701]

Prices rose around 20 cents just last night...around $3.15 in Indiana.

[Lou L]

We keep hearing about the "increase in demand" for fuel; presumably, people are using more of it, and that's subsequently causing the price of fuel to rise.

This is largely anecdotal, but I don't feel like I'm using more fuel...people I know, people I work with, and friend I have don't seem to be using more fuel. I don't hear of any more vacations, more trips, less car-pooling, or necessarily larger vehicles--what's driving the increase in demand? More drivers on the road?

Personally, I think that the media drives the hysteria, and gas prices follow.

[mysterio]

It will hit $4 in the midwest briefly under normal circumstances.

[lmailbvmbipfwedu]

Enough to make a real difference......

[tubebender]

Octane 87 is $3.60 a gallon on the street here in Eureka. $3.50 at Costco. My wife's car demands octane 97 at $3.70...

[TKDietz]

I think they are mainly talking about the growth in demand internationally. There is some increase in demand in the U.S. too, but not a huge amount. Most of us already have cars, but of course or population is slowly growing and that’s going to increase demand even if individually we don’t use more fuel. Things are different in countries like India and China. In these countries only a relatively tiny percentage of the people have cars. Both countries have booming economies though with growing middle classes and upper classes that can afford cars. More and more people in these developing nations are buying cars and other vehicles and so on that burn petroleum based fuels. Booming industries in those nations also drink up a lot of fuel, as do the trucks and boats and planes that ship out all the products being made. This is all likely to continue. It is what is really driving world demand on up, which tightens the fuel supply everywhere, driving up prices for all of us.

[texson66]

Thanks to the demoncrats, we dont drill for oil nearer to the US, we have too many blends of gas to “save mother earth”, and heaven forbid,and we are not building more refinery capacity when we need it! The US deserves what it gets when it elects idiots like House Speaker Ms Dingbat and Senate Majority Leader Pruneface!