Gas Prices Set Record — Again

(CBS/AP)  Retail gasoline prices climbed to another record Monday, while crude oil futures jumped above $65 per barrel amid concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

A gallon of regular unleaded costs an average of $3.196, up from $3.178 on Sunday, according to AAA and Oil Price Information Service. Prices are up 33.7 cents from a month ago and 30.4 cents from a year ago, as demand remains strong, and a spate of planned and unexpected refinery shutdowns have constricted supply.

AAA's Robert Sinclair says already 19 states are averaging more than $3.25 a gallon, primarily in the Midwest and on the West Coast, reports CBS News correspondent Anthony Mason.

"As we start a new week, we have an insanely bullish market, which has already advanced to absurdly high levels," Cameron Hanover's Peter Beutel wrote in a research report. "We are running seven weeks behind normal this refinery turnaround season, after taking an extra seven or eight weeks in the fall to maintain refineries."

The U.S. Energy Information Administration reported last week that gasoline inventories — while increasing to 195.2 million barrels for the week ended May 12 — are still well below the average for this time of year. The nation's peak driving season, meanwhile, is set to begin this long Memorial Day weekend.

Thirty-two million American drivers will be traveling as we kick off the peak driving season. And we're using 16 percent more gas than we did just a decade ago. But we haven't built a new refinery since 1976, adds Mason.

"We're at the point now where every refinery in the United States has to run full out, and even then we can't keep up with demand," Lynn Westfall, chief economist at Tesoro Corp., told Mason. "So the effect of one refinery going down now is felt in the marketplace."

Gasoline futures for June delivery rose 1.23 cents to $2.42 per gallon in afternoon trading on the New York Mercantile Exchange.

Light, sweet crude for June delivery jumped $1.29 to $66.23 per barrel on the Nymex after earlier falling as low as $64.45. Brent crude for July delivery added $1.26 to $70.68 on the ICE Futures exchange in London.

Attackers in Nigeria vandalized an oil installation run by Total SA, the company said Monday. No injuries, kidnappings or production cuts were reported, though.

The attackers caused "a couple of barrel's worth" of oil to spill, but production wasn't affected, a Total spokeswoman said. Nigeria is one of the world's largest crude producers, and attacks on oil installations have become an almost daily occurrence following elections there last month.

The next few days likely will be volatile for oil and gasoline futures, said Jim Ritterbusch of oil trading advisory firm Ritterbusch and Associates.

The inauguration of a new president in Nigeria could lead to more violence, which would drive up prices. The June crude contract on the Nymex also expires this week, which could add to price action, and the federal government will release its updated hurricane outlook.

"That's liable to push things around a bit," Ritterbusch said. "We've got things going on here in the next few days."

In other Nymex trading, heating oil futures rose 3.8 cents to $1.9532 a gallon while natural gas prices fell 3.2 cents to $7.912 per 1,000 cubic feet.

[cbse3]

Change our driving habits....yeah when maybe 65 to 75% are already driving the bare minimum daily survival commuter miles and can't change because over 65% live in urban, no mass transit zones. And most probally, many of our urbanized expanses will never see mass bus a or rail. How can all of our respective leaders, on BOTH sides of the political fence, allow this gas minipulation. Has anyone seen any shortages at the pump, gas lines, ration cards, significant gas station closeures due to no gas???? NO WE HAVEN"T SEEN ANY. The only shortages is what is being told to us. What about the 30 million illegals, how is that impacting the gas crunch. Even if you take 1 / 6 of them having cars, thta's still 5 million cars on the road. Finally, how can our respective leaders, on BOTH sides of the political fence not consider fast tracking 2 years schedule (instead of 10, Toyota is already there) for 30mpg domestic auto fleets, 4 years for 4 major nuke elec gen plants and 2 new refineries plus increasing capacity of at least 4 refineries by 25%. And if they say it can't be done, will then how in the world did the Hover Dam get built in the middle of the darkest depression years that our nation ever experienced followed by war time industrial mobilization that beat the world.....and what have we learned.....it seems like much less and also seem to have forgotten so much more. Keep our dollars here instead of overthere and let's rebuild America.

[phldml]

Ah, Perception5, you may want to check Canadian gas prices..... They're running about 1.10 Canadian per liter, 4.40 a gallon or so. Don't know about Mexico but as long as Buy my oil Bush is in office and he's worried about the rest of the world and not us We'd better get the bikes out of the garage!!!! Take away the borders and give away all our money, Great Presidency !!!

[adventurepa]

Prices are raising as payback for cutting prices during election time.
End of Story!!!!!!!!!!

[edjohn66]

misperception5,

The difference between right now and the 1970s is that there are actually REGULATIONS about drilling and refinery construction. Oil companies want NO regulations, so they don't do any drilling or building.

Ah yes, the age-old conservative tactic of "wait-until-the-last-minute-then-declare-an-emergency."

This way, idiots like you will say "take away all of the environmental regualtions on those poor, overburdened oil companies so we can have cheap gas!!!"

Smarter people don't fall for that trick. Especially since the Republicans have kept any sort of serious alternative-energy projects on hold for 30 years.

We all know who is truly responsible for this mess: big oil and their bought-and-paid-for government representatives, the Republican Party.

Nice try, though.

[drinuk]

Russian scientists recently stated that oil is NOT a fossil fuel and that it being continually produced beneath the earths crust. If that is true and we have no reason to doubt it, then this hike is a scam. Someone somewhere is storing the dam stuff to force up the price with the sole intention of hurting China. In the meantime WE foot the bill, WE get hurt. Thanks George !

[olebd]

If this were true, which I doubt, then how about all the other expenses in today's world? Back in the 60's, the tax rate was 9 percent compared to say 28-34 percent today. Housing was a lot cheaper, salaries went a lot farther. Bills today include internet service, cable or satellitte TV, cellphones, etc, etc. Many which did not exist 20 years ago nor did we need to rely on such technology day-to-day.
Posted by olebd at 08:16 PM : May 21, 2007
..........


Also, add in the cost of health care premiums which come close to, if not exceeding the cost of some people's monthly rent/mortgage payments!

THAT NEVER HAPPENED IN THE 70's!

Though some would argue that cable, internet, cell phones, and other technology expenses are all voluntary....

for the person who would argue that... please try to live without each of those items above and tell us how you go on with your daily life.

(That is if you are not retired or Ahmish).
Posted by biGOilProfit at 09:13 PM : May 21, 2007


Good point, also, most companies offered a great pension system that was little or no cost to employees. No 401k savings to worry about. My dad retired with a pension WITH SURVIVR BENEFITS so now, even after his death, my mom is being taken care of!!!!

The average Joe get screwed from all angles these days.

[perception5]

No new drilling for oil since the 1970's

No new oil refineries since the 1970's

No new Nuclear power plants since the 1970's

WHY ?? because of the Demcrat Party and one of their biggest DONORS America's rich enviromentialists have blocked the construction and drilling for any new sources of oil and nulclear power plants.

Meanwhile Canada drilling north of us and Mexico is drilling south of us.

Now you know why America has no energy.

[nickcat4]

I have been a lifelong resident of southern Louisiana where the oil and gas industry has always been part of our economy. For the last 10 years I have resided within 20 miles from a very busy and prosperous port where ExxonMobil, Shell and CheveronTexaco have done in the past and are currently doing a very brisk and profitable business. Also, within less than 20 miles of this port, gas stations abound with rising prices increasing as record rates of 2, 3, 5 cents per gallon, a day. On Friday, May 18th, gas increased 12 cents!!!!!!! per gallon in LESS than 12 hours at a station located less than 20 miles from the nearby port located near the city where I live. TWELVE cents!!!!!! PER GALLON in less than 12 hours. How can ANY company justify an increase like this???????? There is no major disaster or international event to blame on an increase of prices. In about 6 weeks, these same gas companies will release there 'profits' at the end of the 2nd quarter, and while today they say they have to raise prices, they will announce record profits like no one has seen before!!!!!!!!!!!! Supply and demand aside, there is no other commodity in the world that could get away with increases like this ------- 12 CENTS!!!!!!!!!!!!!!!!!!!!!!

[toshi43]

I'm personally willing pay more for gas and cut back on my driving if it means fewer gas-guzzling, sun-blocking, screw-the-world SUV's on the road. The other day, I watched a guy fill up his Ford Valdez or whatever it was to the tune of almost $100. I hope he saw the smile on my face.

[sparks224]

Apparently in 2000, and again in 2004, some American citizens went to the polls and, of their own free will, and by their own choice, actually voted FOR George W Bush.

Wow what a shock, we%u2019re all being screwed by the oil companies. Who could have seen THAT coming!