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Price of Gas Holds Steady at Record Level

Posted on: Tuesday, 19 July 2005, 12:01 CDT

Jul. 19--The average price of gasoline in Rhode Island held steady as of yesterday, remaining at the record price reached last week.

A survey of local gasoline dealers by the state Energy Office found an average price of $2.419 a gallon, unchanged from last week.

A similar survey by AAA Southern New England found the same average price.

The price of gasoline has risen 30 cents a gallon over the past seven weeks, and is 45 cents higher than it was a year ago.

Gasoline has been pushed to record levels by the high price of crude oil, the principal component of gasoline. Last week, crude rose over worries that oil production in Mexico and the United States would be disrupted by Hurricane Emily.

So far, the impact in the Gulf of Mexico has only been slight. The U.S. Minerals Management Service reported yesterday that 30 oil rigs and 12 platforms had been evacuated because of the hurricane.

However, that represents only 0.86 percent of normal daily oil production in the Gulf of Mexico, according to the MMS.

The evacuations also affected natural gas production facilities in the Gulf, which represent about 0.59 percent of regular daily output, the agency reported.

Mexico's state oil monopoly said it has closed most offshore oil production and ports, resulting in the suspension of 2.95 million barrels per day in oil output until midweek, according to Reuters news service.

Despite the supply disruptions, crude oil for August delivery fell 1.4 percent to $57.32 a barrel on the New York Mercantile Exchange.

The decline may have been caused by speculation that above-average inventories of crude oil in the United States would dampen the effects of the hurricane, according to Bloomberg news service.

U.S. crude inventories were 7 percent higher than their five-year average in the week ended July 8, the U.S. Energy Department reported last week.

In addition, oil prices may have been pushed down by news that the Organization of Petroleum Exporting Countries, or OPEC, lowered its 2005 forecast for oil demand growth yesterday by 150,000 barrels a day. In its monthly report, the cartel said it expects growth to slow next year.

When adjusting for inflation, gasoline has been more expensive. The average price in 1981 was about $2.93 a gallon in 2005 dollars.

The average price of home heating oil in Rhode Island fell by 3 cents a gallon to $2.279 as of yesterday, according to the state Energy Office.

That is 71 cents a gallon higher than it was a year ago.

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Copyright (c) 2005, The Providence Journal, R.I.

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Source: Providence Journal

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