Adamant: Hardest metal
Thursday, March 13, 2003

With Demand High, Analyst Says Gas Prices May Keep Climbing

www.theledger.com Published Wednesday, March 12, 2003 By Michael Sasso The Ledger michael.sasso@theledger.com

Now hovering about $1.70 a gallon, gas prices have room to go up even further, a leading oil industry analyst said. On Tuesday, eight Polk County gas stations were selling regular unleaded for $1.69 to $1.76 per gallon. That's up about a nickel per gallon over prices at the same stations last month. Local prices appear in line with the Florida and national averages for regular unleaded, both of which are $1.70, according to AAA Auto Club South. Industry analysts have attributed the high prices to short supplies of oil, partly because of labor strikes in Venezuela, a leading source of American oil. And with war looming, the oil industry is afraid the oil supply will fall further. So it is raising its prices now in anticipation of higher costs in the future. Last week, a barrel of oil on the futures market rose to more than $39. Essentially, that's the price buyers were willing to pay last week for oil at some set point in the future. In the past few days, that price has dropped to about $36 a barrel, but it may rise again and even eclipse last week's peak, said Tom Kloza, chief oil analyst for the Oil Price Information Service, which studies the industry. Already, supplies of oil are low, while consumer demand has stayed high. Now the summer driving season -- when demand is the highest -- is approaching, Kloza said. "Despite all the ink and all the Sturm und Drang (German for storm and stress) among consumers complaining about prices, the one thing that is consistent and scary is that demand continues to be phenomenal," Kloza said. The high gas prices have felled at least one local gas station. George Weaver of Weaver and Son Service Center in Bartow is considering turning off his gas pumps next month. Instead of selling gas, he'll just operate his repair shop, he said. Right now Weaver is paying his gas distributor $1.73 per gallon for regular unleaded -- more than some stations are selling regular unleaded at retail. He's selling it to consumers for $1.81 per gallon, not much of a profit, he said.

Last modified: March 12. 2003 8:10AM

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