Gas prices nearing record high
EAGLE COUNTY – If you’re wondering what the future will bring, you can get a quick glimpse the next time you fill up your car.Gasoline and diesel prices are approaching the record highs they hit last fall and most experts believe new price records will be set. Crude oil is approaching the record price of $55.17 per 42-gallon barrel set in late October.Gas prices Wednesday in Vail averaged $2.29.6 a gallon for regular unleaded fuel and diesel was at $2.56.5 per gallon. That’s close to the records of $2.33.2 for gas and $2.574 for diesel set in late October.”There’s nothing pointing down,” said Bryant Gimlin of Gray Oil Company, a Denver petroleum wholesaler. “Futures traders are betting there’s going to be a shortage.”He’s guessing higher prices paid for crude oil today by traders will be reflected at the pump in 45 or fewer days.
Last year hurricanes, military actions and terrorism interrupted the flow of oil. This time that’s not the cause.”It’s not a production or pipeline issue,” said Mary Greer of Colorado AAA, a motorist advocacy group. “It’s the futures market saying they don’t know if there will be enough supply for the summer driving season.”Prices are being driven by what experts are calling a “risk premium” – a price that anticipates there will be an interruption in oil supply that will drive prices upward.The statewide average price per-gallon for gasoline is $2.01.4 per gallon, just a few pennies from the record of $2.04, Greer said.Driving the speculation is a weaker dollar. That means you can purchase less per dollar and have to pay more.
Unprecedented global demand is also helping to drive the price upward. The emergence of China as a global energy customer is creating more competition for petroleum products, Greer said.The U.S. gobbles up 25 percent of the 84 million barrels consumed globally each day, Greer said. China now consumes 7 million barrels per day.But if demand decreases during the summer driving season, that could cause prices to dip. Greer said a wet start to last year’s driving and vacation season caused people to postpone vacations and to curtail driving.”They were talking $3 a gallon,” she said. “We got to $2.04.”Fuel analysts are quick to point out that when current prices are adjusted for inflation, gasoline is still pretty cheap. To match the 1980 peak price for crude oil, prices per barrel today would have to hit $93.
Reacting to the new high price of crude, the stock market Wednesday tumbled 107 points.Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or firstname.lastname@example.org.Vail, Colorado