Adamant: Hardest metal
Thursday, January 30, 2003

Summer Gas Prices May Soar Amid Pricey Oil, Low Inventory

www.quicken.com Thursday, January 30, 2003 00:20 AM ET     Crimped by high oil prices and declining crude inventories, refiners are likely to hold off stockpiling gasoline for the spring, and that could result in sharply higher prices at the pump during the busy summer-driving season, Thursday's Wall Street Journal reported

Gasoline prices already have been climbing, pushed upward by the rising price of crude oil. The U.S. average retail price of a gallon of regular unleaded gasoline has risen 8% since early December to $1.47 as of Monday, and prices are expected to go even higher. The Energy Information Administration, the statistical arm of the Department of Energy, predicts an average price of at least $1.50 a gallon in February, a 40-cent-a-gallon jump above the same period last year, and of $1.54 a gallon by midspring.

Those forecasts don't take into account a possible war in Iraq and a subsequent disruption of oil from that Middle East country. A cold February, too, could result in refiners making more heating oil at the expense of gasoline.

The worrisome outlook comes as a strike in Venezuela, aimed at forcing President Hugo Chavez from office, has depleted U.S. crude-oil stocks about 5% since December to 273.8 million barrels. The EIA considers that "very low" -- 11% below the five-year average for this time of year.

Low crude-oil stocks have begun impacting gasoline production. Although nationwide inventories of gasoline are at 216.3 million barrels, about the same as a year ago, the EIA reported that the amount of crude run through U.S. refineries dropped last week by about 400,000 barrels a day to 14.6 million barrels a day, the lowest level since October.

Wall Street Journal Staff Reporters Thaddeus Herrick and Alexei Barrionuevo contributed to this article.

Dow Jones Newswires 01-30-03 0020ET

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