02/23/03 -Analysts Say Gas Prices May Begin Dropping Soon

www.kolotv.com by The Associated Press

CAMARILLO, California (AP) -- Gas prices rose $0.07 per gallon over the past two weeks pushing pump prices to near record levels, but the upward pressure on prices may be easing, an industry analyst said Sunday.

The average weighted price for gas nationwide, including all grades and taxes, was approximately $1.70 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. That price is within 7 cents of $1.77, the all-time high recorded by the survey on May 18, 2001.

Gasoline cost about $1.63 a gallon on February 7, the date of the last Lundberg Survey, an increase of 11 cents over the previous two-week survey.  The American Automobile Association says the average price in Nevada as of Friday was $1.79 per gallon.

"The pace of gas prices has already slowed," Trilby Lundberg said. "The other indicators show a possible decrease in prices."

Increased production in Venezuela, the approach of warmer weather, and the reopening of various U.S. refineries that had been idled for annual maintenance should help slow or end the price spiral, Lundberg said.

Crude oil prices are also up due to fears of a war with Iraq, but if the U.S. goes to war, or if the crisis is resolved, that oil bubble could burst. Prices rose 30 cents a gallon in 1990 after Iraq invaded Kuwait, and then dropped 30 cents in 1991 following the Persian Gulf War, Lundberg said.

"The war premium, like a bubble, could burst and crude oil prices will fall," Lundberg said.

The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.67 per gallon for regular, $1.76 for mid-grade and $1.85 for premium.