U.S. Gas Prices Approach Record Mark

Following Oil's Recent Surge, Trip To The Pump 69 Cents More Than Last Year

(CBS/AP)  Gasoline prices were poised Monday to set a new record at the pump, having surged to within half a cent of their record high of $3.227 a gallon. Oil prices, meanwhile, surged above $108 to a new inflation-adjusted record and their fifth new high in the last six sessions on an upbeat report on wholesale inventories.

The national average price of a gallon of gas rose 0.7 cent overnight to $3.222 a gallon, 69 cents higher than one year ago, according to AAA and the Oil Price Information Service. Last May, prices peaked at $3.227 as surging demand and a string of refinery outages raised concerns about supplies.

That record will likely be left in the dust soon as gas prices accelerate toward levels that could approach $4 a gallon, though most analysts believe prices will peak below that psychologically significant mark. In its last forecast, released last month, the Energy Department said prices will likely peak around $3.40 a gallon this spring; a new forecast is due Tuesday.

The high prices are affecting transportation habits. New numbers out Monday show Americans took more than 10 billion trips on public transportation last year - the most in 50 years, reports CBS News correspondent Ben Tracy. Even in car-centric Los Angeles, subway ridership is up.

Economists say the economic slowdown and the rude awakening that high gas prices are here to stay are finally changing behavior, Tracy adds.

"We're seeing an increase in public transportation nationwide, SUV sales are down, hybrid sales are up. This is a national trend," says Christopher Knittel, an economist at the University of California at Davis.

Retail gas prices are following crude oil, which has jumped 25 percent in a month. On Monday, crude prices surged to yet another record after the Commerce Department said wholesale sales jumped by 2.7 percent in January, their biggest increase in four years, according to Dow Jones Newswires.

The strong sales report suggested to oil traders that the struggling economy may be doing better than thought.

Light, sweet crude for April delivery rose $2.75 to settle at a record $107.90 on the New York Mercantile Exchange after earlier setting a new trading record of $108.21.

Energy investors shrugged off a relative stabilization of the dollar and a cooling in tensions between Venezuela and its neighbors Colombia and Ecuador.

Many analysts believe speculative investing attracted by the weak dollar is the primary reason oil has risen so far so fast in recent months. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

"We've got a Fed(eral Reserve) meeting on the 18th that could see a sizeable rate cut," said Brad Samples, an analyst with Summit Energy Services Inc., in Louisville, Ky. "So, it's not over."

Indeed, while the dollar rose against the euro on Monday, many investors believe the greenback is likely to keep falling as the Fed continues to cut rates. Many analysts believe the rise in crude prices is not supported by the market's underlying fundamentals, noting that supplies are generally rising while demand is falling.

"By gobbling up everything in sight, (investors) are pushing food and fuel prices to ruinously high levels," said Peter Beutel, president of the energy risk management firm Cameron Hanover, in a research note.

Investors shrugged off a weekend cooling of tensions in South America, where Venezuela said Sunday it was restoring full diplomatic ties with Colombia after they were broken off following a cross-border Colombian attack on a leftist rebel camp in Ecuador.

Last week, rebels shut down a Colombian oil pipeline in retaliation for the Colombian raid into Ecuador. Venezuela threatened to slash trade and nationalize Colombian-owned businesses, and Venezuela and Ecuador briefly sent troops to their borders with Colombia.

The potential for conflict involving Venezuela, an OPEC member and major U.S. oil supplier, helped push oil higher last week.

"The Venezuelan production was at risk there," Samples said.

Other energy futures also rose Monday. April heating oil futures rose 2.64 cents to settle at $2.9734 a gallon while April gasoline futures rose 2.06 cents to settle at $2.7149 a gallon.

April natural gas futures jumped 25.5 cents to $10.024 per 1,000 cubic feet, the first time a natural gas contract has closed above $10 since January 2006. Natural gas was following oil higher, but also rising in anticipation of cooler temperatures across the Midwest and Northeast, analysts said.

In London, Brent crude futures rose $1.78 to $104.16 a barrel on the ICE Futures exchange.

[bm6005]

Motorcycles will reduce our dependence on oil. Drag yours out of the garage and start using it. 50mpg on a Harley (no BS), higher mileage on many others.

[libsrweak]

Posted by gunownerdan at 10:40 AM : Mar 11, 2008
+ report abuse

******

NO...thank you...

[michellem99-2009]

Dear Maniemame.
As a Mainer, I was after the cars. I am truly aware truckers are the back-bone of this nation. I am not ather them. Just the cars. I know THEY bring just about EVERYTHING we USE,EAT , I live in Seattle and there is a SAFEWAY right up the hill. Trucks have to,and yes the truckers can bring this NATION to its KNEES or a full SHUTDOWN. It is true 4 wheelers are rude. My Dad use to drive trucks that carried logs.

[jt_lancer]

Most Americans are economic illiterates, thanks to the influence of publick edukashun.

Reading the posts on this board merely confirms my belief.

[jt_lancer]

Truckers ROCK!!!

[mainemade]

I just cant believe all the posts about "ignorant" truckers. The quickest way to shut this country down would be to have all those you call ignorant to park those trucks. Imagine it, every truck shuts off in this country and nothing would move! NOTHING! Not the top $$$ oil/gasoline, not any of the groceries in all the stores, everywhere. Everything is moved by "ignorant" truckers every where. Having been in the industry for many, many years I can tell you they are the smart ones. They get paid to see the country up close and personal. They have to tolerate the ignorant 4 wheelers (automobiles) who seem to think they can fit underneath the rear tandoms of a trailor cause they had to beat the truck around the corner. Truckers do more paper work in an average haul then most receptionist do in a day.
So remember the next time you drive your car, to the grocery store or any other store, to the restaurant, or put up your christmas tree in december that every item you buy, eat or wear on your body or decorate your house with at one time, was most likely transported in a TRUCK.
Truckers park their trucks and this country would come to a halt QUICK!

[gunownerdan]

Billionaire oil men need more money to buy politicians and for new private jumbo jets to add to their collections.
Solid gold toilets are also selling like hotcakes!
They thank you for your support!

[pepperwood2]

"We''re seeing an increase in public transportation nationwide, SUV sales are down, hybrid sales are up. This is a national trend," says Christopher Knittel, an economist at the University of California at Davis.
The strong sales report suggested to oil traders that the struggling economy may be doing better than thought. THIS is a No-No reaction from the Global Warming Agenda.
Oil Outlaws say that the falling dollar & rising inflation is bringing about higher costs. Record profits are in danger. Now who brought about these higher costs from the beginning. Exxon, Shell, Conoco , etc. Thier sounding like victims.
The GWA states that It is imperative that we save the planet at all costs. That means you are expendable. Like it or not. Ever since this Kyoto deal was instituted the objective was clear. You get the world governments together to buy into it. Increase costs of energy until you reach that threshold that people will comply. You either pay them now, cut down or back further, and pay them later.
Don''t take this the wrong way. But let''s be reasonable about this GWA thing. Just how are we the people expected to be able to afford all these high priced energy, earth, & life saving gadgets.
I know, I know, you get your liberal government, crooked politicians, to pass laws outlawing affordable energy. Only approve fuels, which are outrageous in costs, to the people and see how long it is before they have to do without - death - you''re one less to feed, cloth & shelter.

[hillaryin08]

mmmmmm wait a minute, the only Countries that have lower fuel prices than the United States are those that drill for Oil themselves on their own land. Whats going on here.......How come the media fails to mention that?

[hillaryin08]

It%u2019s Supply and Demand Libs. Or did you miss that class? ECON 101. The Demand is finally outstripping the Supply and Oil will hit peak worldwide production in 2012. In the mean time, The US, thanks to the Liberals, we are not allowed to drill on our own land, within our 12-mile offshore limit, build any new refineries or nuclear power plants since the 70''s. But China now has rigs in the Gulf of Mexico? In the mean time your going to chase the Oil Companies out of the US with higher Taxes and more regulation? By the way, Algore is laughing now because he suggested $5 a gallon gas 8 years ago during his campaign to curb carbon emissions. So give it up LIb, this is exactly what you wanted and now you got it. Is being a hypocrite part of the lib gene pool or do you guys learn it?

[hillaryin08]

WHEN BUSH TOOK OVER GAS WAS $1.48 PER GALLON.
NOW IT IS PUSHING 4 DOLLARS PER GALLON...
HE HAS KILLED OUR ECONOMY BY HELPING HIS OIL BUDDIES AND HALIBURTON!

HE SHOULD BE BEATEN FROM OFFICE AND BANISHED FROM AMERICA!

AMERICA STAND UP OR SHUT UP!


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Posted by bluestardad at 08:02 AM : Mar 11, 2008

Your a complete Idiot. Its supply and Demand. Or did you miss that class. ECON 101. The Demand is finally outstripping the supply and Oil will hit peak worldwide production in 2012. In the mean time, The US, thanks to the Liberals,are not allowed to drill on our own land, within our 12 mile off-shore limit, build any new refineries or nucular power plants since the 70''s. By the way, Algore is laughing now because he suggested $5 a gallon gas 8 years ago during his campaign to curb carbon emissions. So give it up LIb, this is exactly what you wanted. Is being a hypocrite part of the lib gene pool or do you guys learn it?

[bluestardad]

WHEN BUSH TOOK OVER GAS WAS $1.48 PER GALLON.
NOW IT IS PUSHING 4 DOLLARS PER GALLON...
HE HAS KILLED OUR ECONOMY BY HELPING HIS OIL BUDDIES AND HALIBURTON!

HE SHOULD BE BEATEN FROM OFFICE AND BANISHED FROM AMERICA!

AMERICA STAND UP OR SHUT UP!

[bluestardad]

WHEN BUSH TOOK OVER GAS WAS $1.48 PER GALLON.
NOW IT IS PUSHING 4 DOLLARS PER GALLON...
HE HAS KILLED OUR ECONOMY BY HELPING HIS OIL BUDDIES AND HALIBURTON!

HE SHOULD BE BEATEN FROM OFFICE AND BANISHED FROM AMERICA!

AMERICA STAND UP OR SHUT UP!

[skyk-2009]

As for blaming Bush, all I can say is I remember when the Enron tapes were revealed with regards to things they said in private, and I will not forget that they were happy at the prospects of Bush becoming president because then they could charge as they please. I don''''t think that was just an isolated situation.


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Posted by rudy654 at 03:12 AM : Mar 11, 2008
+ report abuse

After 7 years of the Bush Administration I KNOW it''s not an isolated situation, although I think, in this case, it may be more Cheney than Bush. We need to get a look at the secrets that low life has.

[brianbwb-2009]

"how do you think of such a thing?" Posted by Jaysea0822

I think you should take your porn spam to the pervert sites, as this is not welcome here.

[brianbwb-2009]

"Maybe it is time to get to know our next door neighbors a little bit better." Posted by exCoachKen

It is time we get to know the world community a little better, then we don''t get suckered into fake wars so easily, hating people only on the word of known liars, and others with nefarious agendas.

I have been working in my own way towards such an end, using music as the bridging language. I have helped to develop music acts that have successfully participated in international world music competitions, and am currently looking for promoters who would be interested in seeing some truly world class jazz and pop artists from Indonesia, and Malaysia, Muslim, Christian, and Buddhist, all joining their talents to make a whole that is greater than the sum of its'' parts.

I hope I can find a way for you to see and enjoy.

[excoachken]

Maybe it is time to get to know our next door neighbors a little bit better.

[brianbwb-2009]

Posted by andyli1004 at 03:28 AM : Mar 11, 2008

Take it to the gay porn spam sites, it will be welcome there, here, it is not.

[brianbwb-2009]

"I don''''t think that was just an isolated situation."
Posted by rudy654

You are right, I could have listed the Lincoln savings and loan, Worldcom, Qwest, The subprime scandal, and thousands of other examples of why corporate corruption is now the norm, and Vietnam, Iran-Contra, Grenada, Afghanistan, and several other countries as example of how government corruption is now the norm, but I didn''t have the space, and I am sure that even the most fascist leaning Bushbots cannot deny the evidence.

I would also ask, (in a friendly manner, mind you, intending no insult) Americans seem to hate Chavez to no limit, but none have any concrete reason why, and no examples of what Chavez has done to them to inspire such hatred, or what corruption he has committed that our own government has not. I find that a bit ignorant, the root word of which is "ignore".

[rudy654-2009]

The following New York Times exerpt of an Enron tape revealed the extent to extort money from the nation. I believe this demonstrates what is going on with oil, as well:

In one January 2001 telephone tape of an Enron trader the public utility identified as Bill Williams and a Las Vegas energy official identified only as Rich, an agreement was made to shut down a power plant providing energy to California. The shutdown was set for an afternoon of peak energy demand.

"This is going to be a word-of-mouth kind of thing," Mr. Williams says on the tape. "We want you guys to get a little creative and come up with a reason to go down." After agreeing to take the plant down, the Nevada official questioned the reason. "O.K., so we''re just coming down for some maintenance, like a forced outage type of thing?" Rich asks. "And that''s cool?"

"Hopefully," Mr. Williams says, before both men laugh.

The next day, Jan. 17, 2001, as the plant was taken out of service, the State of California called a power emergency, and rolling blackouts hit up to a half-million consumers, according to daily logs of the western power grid.