Gas Prices Pinch Triangle

Posted February 22, 2008

— Gas prices jumped Friday to their highest level since June, a possible preview of what many analysts believe will be a record spike in pump prices this spring.

According to AAA numbers out Friday, the national average for a gallon of gas is $3.12.

Here in Raleigh, we're paying two cents more. At $3.14, the Triangle has the highest average price in North Carolina.

While gas prices have risen sharply in recent days in response to oil's dramatic climb to a new record above $101 a barrel, gasoline supplies have quietly grown to their highest level in 14 years.

"We've got a major supply cushion," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois

At the same time, March gasoline futures fell 0.86 cent to $2.5134 a gallon on the New York Mercantile Exchange on the view that supplies are growing while demand is weakening. Oil futures fluctuated as some traders sold in response to growing supplies and others bought on concerns about potential supply disruptions.

Meanwhile, light, sweet crude for April delivery rose 49 cents to $98.72 a barrel but alternated between gains and losses.

Many analysts believe gas prices will rise this spring to new records near $3.75 or $4 a gallon. But not everyone agrees.

Ritterbusch, for example, thinks the high level of supplies, and an eventual decline in oil prices, will pull pump prices down. He doubts prices will rise as high as $3.75 without a major overseas supply disruption or domestic refinery outage.

Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, New Jersey, argues that while gasoline prices won't rise as much this spring as they have in previous years, they are starting from a much higher level. Indeed, prices at the moment are 83 cents higher than a year ago. That means retail prices could peak between $3.50 and $3.75 a gallon, Kloza said, well above May's record of $3.227 a gallon.

The Energy Department's latest forecast calls for gas prices to peak near $3.40 a gallon this spring.

Of course, gasoline prices also respond to oil prices. Oil has traded in a band between about $86 and $100 a barrel for months, a trend many analysts expect to continue throughout the year. That will likely keep gas prices oscillating in their own narrow band around $3 a gallon for most of the year.

While pressured at times by growing supplies, oil prices were supported Friday by word Turkish troops pursued separatist Kurdish rebels into northern Iraq. Concerns that the Kurds would retaliate against Turkish attacks last fall by sabotaging oil shipments out of Iraq had much to do with oil's rise to $100, analysts said.

Word that the key Houston Shipping Channel was closed to oil tankers and other ships for the second day in a row also gave oil traders reason to buy.

Other energy futures rose Friday. March heating oil futures jumped 3.59 cents to $2.774 a gallon on the Nymex and March natural gas futures rose 12 cents to $9.011 per 1,000 cubic feet. Both contracts were being pushed higher by the winter storm pounding the Northeast.

In London, April Brent crude futures rose 87 cents to $97.11 a barrel on the ICE Futures exchange.


This story is closed for comments.

Oldest First
View all
  • moreupset Feb 22, 2008

    Looking at my last post, I need spell checker or an English class. However, I cannot afford the gas to get there.

  • moreupset Feb 22, 2008

    It is getting to the point that no one can afford to drive to work. So just quit you job and suck on welfare. There is no middle class, you are either rich or poor thanks to our poloticians.

  • motorfinga Feb 22, 2008

    Gas prices skyrocket and Bush dances wines and dines with his buddies in Saudi Arabia.

    If I were a Bush supporter I would hang my miserable head in shame.

  • shine Feb 22, 2008

    The oil companies set the stage 6 months ago for this to happen. It is not a problem with refineries, or offshore crude, it is just another maneuver.

  • motorfinga Feb 22, 2008

    Don't you just love this economy brought to you by The Bush/Cheney Junta and The Republican Crime Syndicate aided by the Criminal Oil Cartels and terroist haven George Bush loving Saudi Arabia?

    Yehaw! Gawd bless Amerrrka!

  • US VET Feb 22, 2008

    I own stock in several oil companies and they are reporting the largest profits in company history. Something is terribly wrong here where the average citizen is struggling to buy gas just to get to their jobs and oil companies are flurishing. This jut doesn't add up...

  • WRAL is joe_dirt Feb 22, 2008

    And one more thing. The Rebubees have had 7 years to get it right. We're still waiting......

  • WRAL is joe_dirt Feb 22, 2008

    Note to TROLL. I'm not a Democrat. You bushmongers always assume if you aren't for bush, you must be a democrat. Try again.

  • 3 Sails Feb 22, 2008

    And one more thing, I could care less what Europe pays for gas...I don't live there. I live here and these gas prices are ridiculous. Exxon has reported record profits the last 2 years.Profits in the BILLIONS per QUARTER. The oil companies say there is a big supply?? Wait and see how big the supply is when people can't afford to take vacations this year due to the price of gas....

  • 3 Sails Feb 22, 2008

    Gas in Roanoke Rapids is $3.09 at Wal-mart, $3.19 everywhere else (BP, Texaco, etc.) There are three companies that own or supply all the branded gas in this city. It is always higher here than almost anywhere else. The BP dealer in Littleton, 20 miles west of RR, used to be cheaper than RR. The reason I bring this up is because the local dealers always used freight as their excuse. Funny thing is, they all pull from the same terminals in Selma. It is nothing short of criminal the way these dealers go up on fuel. Gas in RR jumped 10 cents over night, Wed. night to Thurs. morning. Diesel is another issue. Takes less to make it vs. refining gas, but it is 40-50 cents higher per gallon. I assume this is because everything we need, want, or use is shipped primarily by truck or train. Thank you big government.