U.S. Gasoline Prices Skyrocket

(CBS/AP)  The rapidly rising cost of crude oil has prompted a big spike in U.S. gasoline prices, with some experts saying the cost of regular gas could hit $4 a gallon.

The AAA reports that the average cost of regular gasoline in the nation was $3.14 a gallon - up 19 cents a gallon in the past two weeks, according to The New York Times. The cost of gasoline was $2.35 a gallon a year ago.

AAA spokesman Geoff Sundstrom told the Times it was possible gasoline prices could hit $4 a gallon this summer.

"We've gone from a worrying situation for gasoline to one that is quite alarming," Sundstrom told the newspaper.

Driving the increase is the cost of crude oil, which hit an intraday high of $102 a barrel Wednesday as a slide in the U.S. dollar prompted investors to pump more money into energy futures as a hedge against inflation.

The dollar sank to a record low against the euro after the release of three disheartening U.S. economic reports Tuesday that show that the economy is slowing as prices for consumer goods rise. The dollar's decline prompted investors to seek a safe haven from turmoil in the financial markets and the threat of inflation.

"Crude has cracked through the $100-level again and that's driven by financial investors moving money into commodities markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"The U.S. dollar weakened against the euro and the economic data also indicated that inflation in the U.S. rose in January, and commodities are generally considered a hedge against inflation," Shum said. "We are therefore seeing these strong prices that have really little to do with oil market fundamentals."

Light, sweet crude for April delivery spiked as high as $102.08 a barrel in electronic trading on the New York Mercantile Exchange before slipping back to $101.23, up 35 cents.

The contract on Tuesday jumped $1.65 to settle at $100.88 a barrel, a record close.

In London, Brent crude added 33 cents to $99.80 a barrel on the ICE Futures exchange, below the intraday record of $100.30 a barrel set earlier in the session.

The U.S. Labor Department said wholesale inflation rose by 1 percent in January on soaring oil and food costs. And Standard & Poor's also reported that U.S. home prices fell 8.9 percent in the last three months of 2007 from a year earlier.

A report by the Conference Board, a business-backed research group, that its Consumer Confidence Index fell to the lowest since February 2003, far below what analysts had been expecting, indicated that consumers might continue to curb their spending in the coming months.

But traders in both the energy market and the U.S. stock market, which also advanced sharply, seemed largely unfazed. Oil has risen in recent days amid an increase in speculative buying, with some traders believing that global demand will be high enough to support higher crude prices even if the American economy is slowing.

Analysts expect the U.S. Energy Department's Energy Information Administration to report later Wednesday that the nation's crude oil stocks rose last week by 2.4 million barrels, which would be the seventh straight week of gains.

Gasoline inventories are expected to rise by 400,000 barrels while supplies of distillates, which include heating oil and diesel, fell by 1.8 million barrels last week, according to a Dow Jones Newswires poll of analysts.

Also supporting prices were concerns about supply disruptions from unrest in Iraq, a major oil exporter. Turkish ground forces pushed their offensive against Kurdish rebels deeper into the north of Iraq, seizing seven guerrilla camps, officials said Tuesday.

[bm6005]

Pure greed. Congress needs to quit the baseball show trials and grill Big Oil. If not, vote the bums out!
Posted by HarryDoghiny

The mantra of ''08 "Vote out ALL incumbents in November".

[mfox82]

Gas has been going up and down between 2.99 and 3.19 in Indianapolis for weeks, this doesn''t seem like news to me.

The solution isn''t drilling for more oil, there are alternative fuels. I fill up with E85 Ethanol for 80 cents less per gallon, I loose 3 miles per gallon by using it, but its 80 cents less per gallon, and no matter what any article you read says it is less polluting to distill ethanol regionally than import oil from around the world.

Why aren''t there more flex fuel cars? GM has stated that it costs nothing more to make a vehicle flex fuel yet the redesigned Malibu is not flex fuel.

[popstom1]

theres people out there that smarter than me saying
infaltion up 20% in two years I belive it will hit 20%
by the end of the year a windfall tax worked one time. I think That was Bill Clinton''s Ideal I don''t know I think it''s too late for that now it''s been 79 years since last depression this will be a lot harder
more people prison are full the start of uesing food for fuel well all I can say I am armed

[antizion]

There is more oil under Colorado OR the Gulf of Mexico than the middle east. Enough oil under 1 island in Alaska alone to run the US for th next 200 years.

The US never needed a drop of foreign oil, never will.

The jews and arabs are secretly in kahoots against the slave nation or us workers. The jews control the money systems around the earth and the arabs the oil. America, you are owned and it was all made possibel by Rockafeller and his Bush nazi crime syndicate.

[antizion]

Bush was not elected. Two people went to prison for hacking the Ohio election that put him in the white house.

You can''t have your cake and eat it too.

Either two innocent people went to jail or Bush is a dictator and congress is complicit.

Washington DC should not be part of the us. The District of Columbia is not a State. Is that the legal loophole that "the corporation" uses to get around the constitution?

The IRS a private corporation registered in Puerto Rico. The Federal Reserve a private corporation that prints money without government oversight.

All of this is illegal and unconstitutional.

[antizion]

Are you forgetting you can run a car on water?

Puharich patent #4,394,230 : Method & Apparatus for Splitting Water Molecules

Stan Meyer patent #5149407 : Process and apparatus for the production of fuel gas

Youtube stan meyer to watch it work.

You can make pure gasoline from water, natural gas and electricity for pennies a gallon. Google "cherry gas rex research".

We have a Rockafeller Standard oil trust raping the american people. Congress had the nads to bust him a long time ago. Bush crime syndicate are his hired thugs, congress his puppets.

[duffyn]

Well, this happened b4 when the oil companies got so greedy not giving a &^%^ about the country that got them started and it resulted in a huge windfall profit tax. We''ll get another one too - as soon as we get the oil company''s best buddy out of office, mr bush - the worst president we have ever had. And when these &^*hole companies make the big pay back maybe we can use it to pay down the war debt. You know the wars we started to get more oil. *&^ oil - solar, wind, fuel cell - make electricity and drive zero emission no noise electric cars!! oh yeah

[croft777]

The U.S. dollar has been weaker than the euro, for quite some time now. Where have they been? Another bunch of greedy corporate Americans.We need an alternative fuel now. I say lets use all of the organic garbage out there for fuel. We have plenty of that. But we da*mn sure don''t have enough land to grow corn to supply enough fuel for this economy. All this greed in the world is going to colaspe the societies, just watch and see.

[samrensho]

Mission Accomplished!
Posted by incog-nito

Right on - Shrub and Shooter are laughing all the way to the bank.

[jowand]

Pure greed. Congress needs to quit the baseball show trials and grill Big Oil. If not, vote the bums out!
Posted by HarryDoghiny at 01:24 AM : Feb 28, 2008

How are you going to grill OPEC, they are presently controlling enough oil to cause these problems? The Democrat Party are the ones who are stopping oil drilling and refining expansion in the USA.