Gas prices rising to record highs - ... - - and summer's not even here yet - Market speculation, demand are factors in higher prices
2005-04-07
by Jeff Switzer
Journal Reporter
Gasoline prices today are expected to break the Puget Sound area's record high, rising past $2.35 a gallon a full two months before prices really peak with the start of the summer driving season.
``We still think we have several weeks of potential price increases before we see the price start to even out,'' AAA spokeswoman Janet Ray said.
Average gas prices in Washington state have risen 46 cents a gallon since the beginning of the year, while the nationwide average has risen 43 cents a gallon, said Rayola Dougher, American Petroleum Institute manager for energy market issues.
Speculation on Wall Street is in part to blame. The steep rise in gas prices is driven by the price of crude oil, which traded for $55.85 per barrel on Wednesday, and set a new record of $57.27 a barrel Friday.
The other factor in high prices: Drivers are buying gasoline at a growing rate despite the price.
``Demand is staying strong even though we have people telling us they are changing their habits,'' Ray said. ``Overall, there's not enough change in habits to decrease the amount of demand.''
A summer energy forecast is expected today from the Department of Energy.
Regular unleaded gasoline costs -- on average -- more than $2.35 per gallon in the Bellevue-Seattle-Everett area, according to AAA, which surveys and compiles gas prices at 60,000 stations around the country.
Statewide, gas prices in Washington broke through the record statewide average on Tuesday, AAA said.
``We're seeing these higher crude oil prices because the difference between supply and demand on the world market is very thin and has hardly any cushion at all,'' Dougher said. ``The only producer who can step up and turn on the spigot at the well is Saudi Arabia.''
The alternative -- bringing on more production -- ``takes years,'' she said.
Compared to other costs, gasoline is still less expensive now than it has been in the past. According to the energy department, the price would be about $3 a gallon today if the high prices of the early 1980s rose with the rate of inflation.
Jeff Switzer can be reached at
jeff.switzer@kingcountyjournal.com or 425-453-4234.
GAS PRICES
All-time local record: $2.35, May 31, 2004, in Bellevue-Seattle-Everett area.
Current ranking: 5th highest gas prices in the nation.
Two-year low: $1.50 in the Bellevue-Everett-Seattle area on Dec. 30, 2003.
California: $2.51
Hawaii: $2.46
Nevada: $2.42
Oregon: $2.33
Washington: $2.319 (previous record: $2.309 on May 31, 2004.)
Michigan: $2.31
Wisconsin: $2.30
Source: AAA,
http://www.fuelgaugereport.com
