• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Gas Prices: Pump Pain Continues

Posted on: Wednesday, 4 January 2006, 18:00 CST

By Kurt D. Schultheis, The Bradenton Herald, Fla.

Jan. 4--MANATEE -- Wave goodbye to falling gas prices and get prepared for another ascent toward $3 gas, according to a Chicago-based fuel analyst.

Motorists heading back to work Tuesday after a long holiday weekend already saw a 10 cent to 15 cent rise at the pumps. Prices at those same pumps were hovering at $2.15 just before Christmas.

The average price of regular, unleaded gasoline in Manatee County on Tuesday was $2.29 a gallon, according to The Herald's survey of local gas stations.

Phil Flynn, a fuel analyst with Alaron Trading Corp., said we will see $3 per gallon levels again for regular gas even before hurricane season kicks off June 1. The chance of Manatee gas prices falling much in 2006 are slim.

"Prices will keep rising," Flynn said. "The oil supply situation is a lot tighter than first imagined and is credited for the increase in prices."

Nationally, the average price of regular unleaded rose 1 cent Tuesday to $2.22, according to AAA's Online Fuel Gauge Report. That's up 10 cents from last month and 44 cents from a year ago.

The average price of regular unleaded in Florida rose 1 cent Tuesday to $2.28, AAA reported. And the Bradenton-Sarasota-Venice metro area's average price for regular unleaded was $2.27 Tuesday, up 9 cents from last month.

"Since the hurricane season, we have had less refining capacity and more demand," Flynn said. "Demand for gasoline is back up to pre-Hurricane Katrina levels and is already higher than a year ago."

Light sweet crude oil for February delivery rose $2.10, or 3 percent, to settle at $63.14 a barrel on the New York Mercantile Exchange. It was the highest close since Oct. 18, when front-month crude futures settled at $63.20.

February heating oil futures gained 2.66 cents to settle at $1.7964 a gallon, while February gasoline was up 2.31 cents at $1.75 a gallon.

Many analysts believe the average price of oil will be below $60 in 2006, but not by much as U.S. and Chinese economic growth continues and OPEC members eye a production cut.

Other bullish factors in the price increase mix included cold rain and snow in the U.S. Northeast and a natural gas dispute between Russia and Ukraine that unnerved Europe.

But Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association, doesn't buy what he calls "excuses for Big Oil."

Smith said that oil companies are saying they have a reduced amount of gasoline stocks because of the high demand for heating fuel.

"That's a bunch of bull," Smith said. "We also have a reduced demand for gasoline up north because not as many people are driving in winter conditions. The logic doesn't make any sense."

Smith said that since July 7, Florida statutes have dictated that gas stations can only raise their prices to compensate for their rising costs.

"Our members are mad as hornets because their cost of doing business is already going through the roof in 2006," Smith said.

Motorists still thought gas they bought Tuesday was a bargain compared to the $3 prices they paid during the summer when Hurricane Katrina altered the Gulf Coast's petroleum production. But gas station owners and managers already have a sick feeling in their stomachs just four days into the new year.

"It's frustrating," said Wesley Foust, manager of Palmetto Shell at 301 Eighth Ave. W.

Foust's prices rose last Friday, from $2.24 to $2.33 for a regular, unleaded gallon of gas.

Bob Headlee, owner of Creekwood Crossing Exxon in East Manatee, said his prices rose steadily for the past three weeks.

"Our profits are the lowest they have been in the last three months. Happy New Year," said Headlee, whose station was serving up regular unleaded at $2.28 per gallon Tuesday.

The downward trend in gas prices came to a grinding halt right before Christmas, when about 80 percent of the more than 63 million Americans who traveled jumped into cars for a holiday trip, according to Randy Bly, spokesman for AAA Auto Club South.

More than 3 million of those travelers were Floridians.

"While it's normal to see gas prices rise for the holidays, we just don't know how much prices will fluctuate until spring arrives," Bly said.

Bly said consumers need to conserve gas to get the prices down.

"We recommend keeping your cars well maintained, checking air pressure in your tires and combining errands into one trip to save gas," Bly said. "If everyone did that, the conservation efforts would make a huge difference on the price factor."

Smith said consumers helped to bring gas prices down this past summer because they expressed their concern vocally and watched their driving habits.

"Let's hope they speak up again," he said.

The Associated Press contributed to this report.

-----

To see more of The Bradenton Herald -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.bradenton.com.

Copyright (c) 2006, The Bradenton Herald, Fla.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: The Bradenton Herald (Bradenton, Fla.)

More News in this Category