Gas Prices Driven To Record High

New National Record Follows Oil's Recent Surge; Analysts Divided On Forecasts

(CBS/AP)  The cost of filling up the family car jumped to a record high Tuesday, adding to the challenges consumers already face with falling home values and rising food prices.

Gas prices at the pump rose overnight to a record national average of $3.2272 a gallon, according to AAA and the Oil Price Information Service. That's a tad higher than the previous record of $3.2265, set last May.

A year ago, rising demand and a string of refinery outages had raised concerns about supplies. Now, the soaring price of crude oil is the culprit, propelling gas higher even though supplies are at 15-year highs.

On Tuesday, light sweet crude for April delivery surged to a new record of $109.72 on the New York Mercantile Exchange before retreating after the Energy Department and International Energy Agency cut crude consumption forecasts for this year. In afternoon trading, crude fluctuated, falling 13 cents to $107.77 a barrel, but alternating between gains and losses.

Where gas and oil go from here is anybody's guess. Many analysts expect prices to moderate, while others predict oil could keep rising to $120 a barrel, or higher. And with demand for gas expected to rise as warm weather arrives, analysts say pump prices could spike as high as $3.75 a gallon, regardless of what happens with oil prices. The Energy Department on Tuesday raised its forecast of how high prices will rise this spring by a dime to $3.50 a gallon.

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.

"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.

Still, because gas is so expensive, analysts expect demand for fuel will rise more slowly this spring and summer than in previous years. Nationwide demand for gasoline is off by about 1 percent over the last 6 weeks, a trend analysts expect to accelerate if prices keep rising.

"We don't go visit family as much," said Steve Bagosy, of Pocono, Pa., while gassing up a company car in Manhattan Tuesday. "Just try to stay local."

The effect can be seen in states such as California, where prices are consistently 30 cents higher than the national average. Last November, the latest month for which data is available, demand for gasoline fell by 3.7 percent from the previous year in California as prices soared past $3.40 a gallon.

"It evokes a real reaction in demand destruction above $3.25 a gallon," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

Prices have already passed the $4 mark at many stations nationwide. But Kloza thinks slower demand growth will prevent the national average from rising that high.

High gas prices may actually help some companies that rely on tourism. Carl Wilgus, executive director of the Pocono Mountains Visitors Bureau, said the number of skiers visiting the Pennsylvania ski region this winter was up, despite gas prices holding steady above $3 for most of that time. In part, that's because many people plan vacations closer to home when fuel is so expensive, he said, giving up a trip to Florida in favor of a ski vacation an hour away, he said.

"We'll definitely lose some visitation, but hopefully we'll gain some from the folks who hope to stay closer to home," Wilgus said.

The sheer price of gassing a recreational vehicle may induce some to look for campgrounds closer to home this summer. At $3.50 a gallon, a 100-gallon Winnebago Destination RV will cost $350 to fill, $27 more than right now, and $96 more than a year ago.

Analysts believe oil's underlying supply and demand fundamentals do not support such high prices, and argue that crude's rise in recent months is mostly due to the falling dollar. 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 weak.

The Energy Department and IEA, an energy consultant to western, industrialized nations, raised more concerns about the economic slowdown's impact on oil consumption Tuesday when both forecasters cut U.S. demand growth forecasts, but said strong demand overseas will keep prices elevated this year.

Other energy futures were mixed Tuesday. April heating oil futures fell 0.82 cent to $2.9652 a gallon while April gasoline futures fell 1.09 cents to $2.704 a gallon.

April natural gas futures fell 9.1 cents to $9.933 per 1,000 cubic feet after.

In London, April Brent crude futures rose 5 cents to $104.21 a barrel on the ICE Futures exchange.

[mainemade]

Gas prices at a record high, oil at a record high. Due to those facts the cost of living is at record highs. Unemployment at a record high. And people wonder why people are resorting to stealing, dealing and other criminal activities to make a buck. Some even resort to suicide/mass homicide. Its us, the average joe, the working poor who are paying the biggest price of all. The average household expenses have more then tripled in recent years. Yet the average income hasn''t gone up with the cost of living.
Wake up people, It''s time we clean house in all levels of politics, locally and nationally. We as Americans ALL need to stand up for ourselves. I personally am done being bullied by the Bush administration.

[doctariusa]

Driven is right. Nothing more than uncontrolled speculation. The average person cannot afford it. To the poor it is hopeless. They have to get it down and finally do the things neccessary to get off the oil. The problem lies with our politians, democrats and republicians a like, who are in thre bag of the big oil companies.

[watcher269-2009]

Big Whop! Gas prices in Europe are 7 dollars a Gallon.

Just wait America - It''s comin'' your way - wait till oil converts to the Euro!

Then it will be 4 Euro a Gallon and 10 Dollars a Gallon!

Thank the Two Texans in office for that!

[antizion]

One other thing - you can run a car on nothing but water. Stan Meyer and Dr. Puharich are two names to learn more about.

Charged water explodes when ignited by a plasma generated from a pulse compression circuit. No need to separate into hydrogen and oxygen with electrolysis.

[antizion]

The scumbag oil speculators are the reason for this..
Posted by b48151 at 06:28 PM : Mar 11, 2008
================================

That is the propaganda idiot. Here is the reality, the US dollar is backed by two things:

1. Fractional lending (The interest you pay on your consumer debt - 2.52 trillion dollars) They get richer as you get poorer.

2. Middle east oil.

Greenspan is asking gulf oil producers to stop using dollars to sell oil in order to collapse the dollar.

The chaos of an economic collapse will help US Zionist war criminals accomplish their goal of deflecting the theft of 2.6 trillion dollars from the pentagon budget office that was supposed to pay off your consumer debt. on sept 11 2001. NESARA descision - the reason that 911 was an inside job.

In the fall of 2008, watch the US financial sector be destroyed and moved (stolen) to Israel.

Why do you think Israel has a special internet backbone unique in the world?

[rudy654-2009]

Posted by libsrweak at 10:02 PM

Now go take those wheels off your house! You bumb!

[rudy654-2009]

Posted by libsrweak at 10:00 PM

You know, you are just a ridiculous clown acting out all kinds of nonsense on a message board. You are a mental case.

[rudy654-2009]

Posted by libsrweak at 12:01 AM

The oil corporations are definitely spoiled on our tax money being provided to them as corporate welfare.

[ubrew12]

Sumarongi said: "Soon it will be America, land of the incarcerated." Haven''t you read the latest statistics? It already IS ''America, land of the incarcerated.'' The rest of the world is laughing...

[sumarongi]

Chic-a-boom, Chic-a-boom, don''t you just love it.
Don''t wonder why someone who is trying to support a family on $290.00 a week is turning to selling drugs or theft to make ends meet.
Minimum wage workers in this country are now being forced to learn some hard lessons about deficit spending. Not having access to platinum cards, they are being forced into a corner. Remember, cornered rats bite hard. Violence may be coming to a corner near you and you shouldn''t wonder why. People are getting desperate and the results are rather predictable. Then again, if they get caught and go to jail they no longer have to worry about housing, food, or health care. Soon it will be America, land of the incarcerated.

[michellem99-2009]

Yes it is in the UK but they are driving better cars are they not,here in America they won''t build cars that get good miles to the gal,

[jt_lancer]

RE: ''Many of the problems we have in this country are because we don''''t have a leader in charge.''

I find it amazing how the sheeple slavishly slobber all over ''government leaders'' as if they can magically fix everything.

You say that if FDR were in charge, he would stop price gouging and get the drugs out of the schools?

Would he also cure cancer and heal the blind?

In reality, many of the problems we have today are caused by the very government ''leaders'' that the sheeple obligingly elect to run their lives.

It is not much different from a slave ''choosing'' his Master.

[marcpcbs]

Many of the problems we have in this country are because we don''t have a leader in charge. We traded in our leaders for politician%u2019s years ago. If FDR were around today he would go behind the scenes and put a halt to the price gouging at the pumps and he would also get the drugs out of our schools. He would do these things and more in short order.

[jt_lancer]

Think gas is expensive here? Try England, where they pay about $8 per gallon of gas.

Of course, 75% of that cost is taxes collected to pay for their ''free'' health care.

[libsrweak]

now how can a liberal DRIVE his "no war for oil" bumper stickered SUV to his next protest IF HE CANNOT AFFORD GASOLINE..oh well i guess they would just stay home and whine about it on cbs

[libsrweak]

these liberals forgot this word called ''sacrifice'', if the dont get it fast enough, cheap enough and with a smile..they would whine and call you a facist...

"oh they love thier steaks as long as they dont see how the cow was butchered"

[libsrweak]

Remember those old pictures of Chinese riding bicycles everywhere??? Well now, they all have cars, and Americans are riding bicycles,.....
Thanks, Neocons !!!

Posted by veteran71 at 08:46 PM : Mar 11, 2008
+ report abuse

********

and the chinese were fit and the americans are fat..now the americans are fit and the chinese are fat..thanks neocon..

[michellem99-2009]

I am 53. When I was a child/teen I did not get want I wanted. I got 2 sets of clothes that was worn at school. A box of pads. 2 sets of clothes that was worn at foster home. I walked when not in school. I did not have name-bland clothes. Ye are the parents if ye say no mean it. I was 51 when I got computer, and kids don''t need the top of the line one just to do school work. As for cars they don''t need them. I have never had one as the blind can''t drive.

[michellem99-2009]

I am 53. When I was a child/teen I did not get want I wanted. I got 2 sets of clothes that was worn at school. A box of pads. 2 sets of clothes that was worn at foster home. I walked when not in school. I did not have name-bland clothes. Ye are the parents if ye say no mean it. I was 51 when I got computer, and kids don''t need the top of the line one just to do school work. As for cars they don''t need them. I have never had one as the blind can''t drive.

[olebd]

Posted by albinm at 09:01 PM : Mar 11, 2008

I also notice the school buses stop at each and every block these days. It might be best to build bus stops again that the kids walk to at the end of each neighborhood. I''m sure it would save wear and tear on the buses.