Turmoil could cause higher gas prices
Editor's Note: These stories would not have been possible without the guidance and help of Lizette Galindez Silva.
Stories by Mark Schlachtenhaufen February 02, 2003
If the two-month-old general strike in Venezuela continues and U.S. troops invade Iraq, UCO commuters could soon be paying significantly higher prices at the pump. Resulting lingering uncertainties are pushing prices even higher.
"That's enough to make the market fairly jittery," said Chuck Mai, AAA Oklahoma public relations director.
Other factors influencing the oil market include OPEC's increase in production by 1.5 million barrels a day, winter weather, which is driving heating oil prices higher, and the low level of crude oil stocks, said Lowell Feld, Energy Information Administration (EIA) world oil market analyst.
An AAA Oklahoma survey of local regular self-serve prices shows metro prices are higher than they were one year ago, but lower than the record high of $1.73 per gallon of regular unleaded gasoline recorded on June 20, 2000.
The metro average price for a gallon of gas on Jan. 22 was $1.36 per gallon, compared to 99.9 cents per gallon one year ago, a difference of 36.9 cents. If there were no war with Iraq and the situation in Venezuela improved, prices over the coming months would remain comparable, Mai said.
If U.S. troops do invade Iraq and the situation in Venezuela worsens, prices could go as high as $1.55-$1.60 a gallon, Mai said. How long they would remain at that level, or just how high they could climb would depend on the duration and extent of the two crises.
"Anything is possible," Mai said.
The national average for a gallon of gasoline was $1.45, the highest amount since Sept. 24, 2001, said Doug MacIntyre, EIA senior oil analyst. Fears about Venezuela and Iraq briefly drove oil prices above $35 per barrel Jan. 21. They ended the day at $34.61 per barrel.
The higher the price per barrel, the higher the price of gas at the pump, MacIntyre said.
Before the national strike, Venezuela was exporting 1.5 million barrels of oil per day to the United States, Feld said. The current estimate ranges from 600,000 to 800,000, the lower figure being offered by strike leaders, the higher figure by the government.
The United States receives about one-fifth, or 20 percent, of its total oil imports from the Persian Gulf region, McIntyre said. A U.S.-led war against Iraq would have negative consequences throughout the oil-producing region.
Recently, President Bush has been pressing the case for taking action against Iraq sooner rather than later.
Numerous UCO students commute to school from various sections of Oklahoma City, already driving up their monthly gas bills. Some said they are very concerned about the prospects of paying increased prices at the pump.
Ayyappan R. Muthuvel lives in north Oklahoma City. He said he currently spends about $100 each month on gas. If prices increase too much, he will have to shuffle his budget and search for ways to come up with the extra money.
"Gas is one of the most important things. It is the driving force of the common man. It's going to affect everyday life in a very big way," Muthuvel said.
He said he hoped former President Jimmy Carter could resolve the Venezuelan crisis.
"It's better if things are solved diplomatically rather than militarily," Muthuvel said.
Shawn McCleary lives in Oklahoma City, near Millwood High School. He said he spends about $30 per week on gas and he would be happy if prices remained the same.
Instead of worrying about the world situation, he said he concentrates on school, sports and his one-year-old daughter.
Laura Oden spends a lot of her time on the road driving to UCO from northwest Oklahoma City. She said she probably doesn't follow current world events as closely she should. Her parents pay for her gas.
"I already think it's kind of high compared to what I remember a couple of years ago," Oden said.
Mai encouraged consumers to shop around for the best prices. He said Oklahoma, with its numerous retail outlets, has a competitive market compared to other areas.