U.S. Gas Prices Kick Into Overdrive

Surging Price Of Crude Oil, Expected Gasoline Shortages Spur Latest Increase

(CBS/AP)  Gas prices rose further into record territory Monday, pulled higher by resurgent oil futures and a growing belief that gasoline supplies are falling as the summer driving season approaches.

Oil futures, meanwhile, jumped by more than $2 a barrel as traders bet the Federal Reserve will continue cutting interest rates. Comments from OPEC suggesting the cartel plans no production increases also boosted oil prices.

At the pump, the national average price of a gallon of gas jumped 3.6 cents over the weekend to a record $3.339, according to AAA and the Oil Price Information Service. That's 58 cents higher than a year ago. In New York Mercantile Exchange trading, May gasoline futures rose 3.56 cents to $2.7923 a gallon.

The Energy Department expects retail gas prices to peak above $3.60 a gallon later in the spring, said Guy Caruso, head of the department's Energy Information Administration, according to Dow Jones Newswires. Many analysts see prices peaking closer to $4 a gallon.

Gas prices are following crude futures higher, but they're also rising on concerns about supplies and demand. Analysts say refiners have cut back on gasoline production due to low profit margins; the rising price of crude means it costs them more to refine gas.

And last week, the Energy Information Administration said gasoline inventories fell more than expected during the week ended March 28. Gasoline demand rose for the first time since January, raising the prospect that supplies will fall further as Americans drive more during the spring and summer.

"It's very normal that you see the ratcheting up of (gasoline prices) before its season," said Stephen Schork, an energy trader and analyst in Villanova, Pa.

Despite last week's increase, Caruso expects demand for gasoline to fall by 85,000 barrels a day this summer compared to last due to high prices and the weak economy, Dow Jones reported. That would be the first summertime decline in gasoline demand since 1991.

To date, however, falling demand has failed to deflate surging gas prices, which are putting more pressure on consumers already suffering from higher food prices, falling home values and a tight job market. One of the factors pushing food prices higher is diesel fuel, which is used to transport most of the world's food, industrial and consumer goods. Diesel prices, while holding above $4 a gallon, have retreated lately, and fell 1.5 cents overnight to a national average of $4.007.

In oil trading Monday, May futures rose $2.89 to $109.12 a barrel on the Nymex as traders shrugged off a slightly weaker dollar and bet that future Fed rate cuts will weaken the greenback. A weak dollar attracts investors to hard commodities such as oil, which are seen as a hedge against inflation. Also, a falling dollar makes oil cheaper to investors overseas.

The prospect that the Organization of Petroleum Exporting Countries will hold production steady this year also pushed oil prices higher Monday.

"OPEC's Secretary-General, Abdullah al-Badri, made it clear over the weekend that the cartel continues to believe that the world is sufficiently supplied with oil and ... has no plans to increase output any time soon," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn., in a research note.

Oil futures are nearing last month's trading record of $111.80 a barrel after a swoon that twice brought them briefly below $100.

In other Nymex trading Monday, May heating oil futures rose 9.58 cents to $3.0879 a gallon while May natural gas futures rose 49.6 cents to $9.818 per 1,000 cubic feet. Analysts said heating oil and natural gas futures were boosted by forecasts for cooler weather over the next two weeks.

In London, May Brent crude rose $2.29 to $107.19 a barrel on the ICE Futures Exchange.

[sgtrds]

The oil companies are busily, almost desperately, gouging the public while their lapdogs Bush and Cheney are still in power. The only real question left is how big and Bush''s and Cheney''s illegal kickbacks for their share in this criminal enterprise.

[Gary Kempf]

CBS, I see you are still failing to complete your news report from this morning. THe other major reason gas continues to climb, "wait for it", The oil companies are not manufacturing gasoline, They aren''t making any profit.......

[stn_sage]

Everyone in the public can believe whatever he/she wants! But I for one, don''t believe the standard lines thrown to the public for the last sixty years!

I believe it''s profit-gouging, all-the-way, baby!

What I really wonder---and we''ll never find out---is how much in "contributions" Bush/Cheney receive for getting/and keeping the war in Iraq going & not instigating price controls?! It better be a lot! To ruin your country for ''chump change'', would be the height of stupidity!

[dinodavid220]

profit-gouging........."sigh"

[lorrieann51]

Isn''t it funney that when the Big 5 people were meeting with the Congress, oil went down a bit but now the B/S was passed, here we go again. I wish that Congress would grow some balls and force oil people to STOP HOLDING THE PEOPLE HOSTAGE!!!!!!! But, of course, the refiners are going to cut back due to "lack of profit." I DON''T KNOW WHAT THE AMERICAN PEOPLE ARE WAITING FOR TO REVOLT AGAINST BUSH, CHANEY AND ALL OF THE OTHER MORONS IN OFFICE!!!!!!!!!!!!!!!!

[hermitdave]

So much for putting OIL AND GAS men at the top of the ticket I guess. Shame George lost that small oil company Osamas brother loaned him the money to start. He would be as rich as Bill Clinton now.

[liberalme]

The oil companies are busily, almost desperately, gouging the public while their lapdogs Bush and Cheney are still in power. The only real question left is how big and Bush''''s and Cheney''''s illegal kickbacks for their share in this criminal enterprise.

Posted by SgtRDS at 02:48 PM : Apr 07

Would love to get our hands on the names of some phony off shore accounts huh?

[jumkey]

Of course it''s gouging. We''re still debating this?

Funny thing, gas in Las Vegas is always cheaper than gas in Los Angeles - even though the gas gets to Vegas in a pipeline from LA.

But I''m sure there are legions of Bushies out there that will deny this reality.

[budshoes]

Yeah! What about that comment? "Analysts say refiners have cut back on gasoline production due to low profit margins; the rising price of crude means it costs them more to refine gas." Huh? Is that right? WELL... I guess no one is making money on gas anymore. Did I get that right? Who the heck is foolin'' whom here?

[marcpcbs]

Were not in a recession, the oil companies are simply stealing every spare dime we have in our pockets and in doing so the oil companies are stealing from every other business in the USA. No one can afford to buy anything because of fuel costs.

I wonder if there is a specific law stating that it''s illegal to tar and feather oil speculators?

[bgwinnett]

Wait till we bomb Iran oil will be $200 a barrel at least, then when the effect''s of Peak Oil hit the price will be over a $1000, Mad max days here we come.

[drivelphobe]

The higher the gas prices, the fewer boats on the lake and the traffic will lighten up. Also, there will be some great bargains on SUV''s and motor homes. These are good times for some. Just another cycle to pass through.

[Syndicate]

The Government makes more on that gallon of gas than the oil company, delivery driver and store owner combined.

[lorinkundert]

Can you say "Price Gouging"? Don''t believe any of the excuses, the profits would stay level instead of the record increases if oil price was the real driving factor.

[underdogus]

the US will be a third world nation, fasten your seat belts.........

[lochlan-2009]

The oligarchy has already started turning the dollar around. If you want to make cash, short the commodities market starting right now. Also, the Dems and their "global warming" scheme is entirely for the alternative energy market. The wealthy have been moving their money there for the last several months, and when the Dems get in, the tax incentives for corporations being "green" are going to guarantee growth in this sector (practically every major company knows this). Oil will be going down over the next three-four years due to the bringing back of the dollar by the world banks, and increased oil drilling around the world. The pipeline in Afghanistan should be getting built within a couple of years (i.e. reinforcing troops in Afghanistan).

It''s all fixed, and getting rediculously predictable.

[noloyalisti]

The United States has the cheapest gas is the world. We do not produce even close to what we use and we do not deserve to have so much. The best thing that could happen would be for gas to double in price to $7/gallon as long as the profits are severely taxed for paying down debt and for social services.

What we really need to do is conserve, stop buying SUVs and sports cars. Start living in smaller houses that are not in suburbs and stop consuming so many goods and services.

[lochlan-2009]

"The United States has the cheapest gas is the world."

That is completly untrue.

Lebanon Beirut $2.63
South Africa Johannesburg $2.62
Nicaragua Managua $2.61
Panama Panama City $2.19
Russia Moscow $2.10
Puerto Rico San Juan $1.74
Saudi Arabia Riyadh $0.91
Kuwait Kuwait City $0.78
Egypt Cairo $0.65
Nigeria Lagos $0.38
Venezuela Caracas $0.12

[idnnsg]

Gas price per gallon in Caracas, Venezuela: $0.12

Venezuela offered to GIVE us gas after Katrina hit, and emperor Bush said, "No way!".

You may wonder why Bush did that. It''s simple: the oil companies are Bush''s friends. They are making gobs of profits! Bush wouldn''t want to mess with their success. If the "little people" are hurting, the emperor doesn''t give a damm.

[michellem99-2009]

We live in a small apt..take the city bus. I use a microwave to cook as I am legally blind. Use a 60 watt light on computer. Use clothe bags and have for years. Walk. Conserve..I do my best..I must use TV dinner-the lowest cost ones. Wash full loads, Have trmal drakes on the windows. Recyle..The high gas prices hurt the poor the most. That is what Bush has done. Park yer car in yer drive way and take the bus..

[xlib]

It would be nice if the state & federal governments rolled back the high taxes on each and every gallon of fuel. You never see the taxes mentioned, do you? Here in hill''s nanny state of NY we pay higher gas prices then the neighboring states of Ohio and Pennsylvania. The further south you go, the lower the price.
idnnsg-site your source for your statement on chavez.

[prinzowhales]

Why roll back taxes? That will just allow Big Oil to raise prices to make up for the cuts...then where will the Highway Trust Fund get the money to build and maintain the roads?--tolls?

[rudy654-2009]

Remember folks, big oil produces a barrel of oil at a cost of only 13 dollars. They turn around a make a killing on it, while the government provides them with tax breaks and other forms of corporate welfare. That should tell you exactly who is buying the three branches of government.

[prinzowhales]

Big Oil prices the market...cutting taxes will just allow them more profit. The increased prices have already allowed them to increase their profits to the point where their returns will not suffer if they sell considerably LESS oil...the margins are what matters and the cost of production has not budged.

Putting a few oil executives against the wall with their bankers will, however, have an effect on oil prices.

[scottyusa]

"Analysts say refiners have cut back on gasoline production due to low profit margins; the rising price of crude means it costs them more to refine gas."

Have you ever heard such a crock? What were the profits last year? 123 billion I believe. So much for Congressional hearings with the top CEOs. The problem is that now the oil industry has gotten used to "record" profits. Anything less is not an option. Maybe we should nationalize the oil companies like Chavez has in Venezuala.

[lochlan-2009]

Have you ever heard such a crock? What were the profits last year? 123 billion I believe. So much for Congressional hearings with the top CEOs. The problem is that now the oil industry has gotten used to "record" profits. Anything less is not an option. Maybe we should nationalize the oil companies like Chavez has in Venezuala.

Posted by scottyusa

Cathcing on... In case you havn''t noticed, D.C. and corporate America are the same people.

[rudy654-2009]

Big oil is quickly and surely losing in good will from consumers. Eventually people will have had enough. I hope in the end all the profits were worth the chaos they are surely putting in place.

[prinzowhales]

scottyusa--That may well be true for independent refiners if there are any...the profits are being nursed out before the oil hits the refinery...I suspect it is part and parcel of transfer pricing on the international oil...In the 19th century insiders would suck the profits out of the railroads through engineering firms that laid the tracks.

[prinzowhales]

Give Castro his due...When Big Oil tried to rip off Cubans, he nationalized them...I don''t want these people to have any compensation either...I want it taken from them straight out--give the little stock holders and employees their due...but the Big Boys... make ''em suffer.

[lochlan-2009]

Eventually people will have had enough. I hope in the end all the profits were worth the chaos they are surely putting in place.

Posted by rudy654

Americans have short attention spans, and they know it full well. When the prices come back down, and they have no choice when the dollar comes back, Americans will completly forget what they endured the last four years.

[prairiefox1]

AFTER THE STAGED CONGRESSIONAL HEARINGS OF THE HIGH PRICES OF GASOLINE THEY ALL LAUGHED AFTER THE CAMERAS WERE TURNED OFF AND JACKED UP THE PRICES AS USUAL!!

[prinzowhales]

Who has ever had any good will towards the big oil companies?

[prinzowhales]

The oil companies have even less reason to be afraid of their hirelings in Congress than Bush has to be afraid of the toothless, spineless, Pelosicrats there.

[lochlan-2009]

Why do you think they''''ll come back down when/if the dollar is back?

I tend to think they are trying to get us used to these prices...


Posted by jh6379

The dollar has to come back in order to finish the rip off the banks and oil companies did over the last several years. When the oil companies were making their $40billion/year each, the global worth on their $40billion is right now $20billion (the major reason we are paying such high prices), but when they bring the value of the dollar back, their $40billion will now be worth that globaly. All comodities (gold, silver, platinum, oil) will follow this path. The global warming rhetoric is to move money to alternative energy, and they are pushing hard in the media.

[nudder1-2009]

I am amazed that there are no commentary about the massive speculation in the oil markets. There are ten times the available crude oil traded every day by a combination of commercials and hedge fund speculators. If you combine the inflation effect of the speculation along with the lowering of the interest rates by the Fed we are providing the "perfect storm" for a major crash and burn of the average american worker. I am sure that the big investment banks are gratefull for the Fed bailing them out while the rest of the country drowns in inflation. Where are all the level heads in Washington now? Probably speculating in the NYMEX!

[liberalme]

what an ignorant post

Posted by jamesm12341 at 04:40 PM : Apr 07, 2008

Let''s hear what you know on the subject jwind11--come on--no more rude comments---contribute something intelligent--something with substance something factual!!

[underdogus]

jamesm12341..have some milk and cookies and go to bed everything will be alright...

[sharncedar]

The people I know are extremely spoiled, they do nothing useful and expect to live like Kings and Queens of old in massive mansions driving expensive cars long distances at their whim. It has gone bizarre in the last 10 to 20 years, we have virtual morons living in luxury palaces all on borrowed money. You go in this huge, expensive house, with huge expensive trucks and SUV''s parked out front and the people inside are living like third-world imbeciles, with junk all over and kids who can''t even read and write, glued to their TV sets and eating microwave trash because they can''t even cook or clean up after themselves. Like morons or drug users. It is truly bizarre.

[marcosis78]

I think its pathetic how they use the excuse that during the summer, when everyone is out and about, they need to lower output for upgrades and updates. How about doing it during the winter?!? Also, how about not making the nations largest outputs JUST in the line of hurricanes, ie Gulf of Mexico, and off the coast of Georgia. I solely believe that Bush is mostly behind it all. I just find it odd that oil prices have tripled to quadrupled since his presidency. Also that hes an oil tycoon himself. It just goes to show that how pathetic minded the people are who voted for him to "make things better." Whats worse, selling out your country to the Saudis or getting "sexual relations" in the oval office? Which one affects you as a consumer and a person more?

[bgwinnett]

The dollar has to come back in order to finish the rip off the banks and oil companies did over the last several years. When the oil companies were making their $40billion/year each, the global worth on their $40billion is right now $20billion (the major reason we are paying such high prices), but when they bring the value of the dollar back, their $40billion will now be worth that globaly. All comodities (gold, silver, platinum, oil) will follow this path. The global warming rhetoric is to move money to alternative energy, and they are pushing hard in the media.

********************

The Dollar won''t come back, The US is going to sacrifice it to inflate it''s way out of $9.3 Trillion of debt.Impoverishing the average American in the process.

[aggiekat2004]

And some idiot Democratic senator wanted to add a tax to gasoline to discourage people from driving? What about those of us who HAVE to drive for our jobs? They''re just penalizing all of us.

Record profits for the oil companies that are killing the rest of us.

Thanks, King Shrub...

[irliberal]

Posted by SharnCedar at 05:41 PM

Wow, what a depressing world you live in. It''s nothing like the America I know. Maybe medication would help as I''m sure it''s not really as bad as you write.

[labrat9999]

Nothing is going to change...except the price of oil will continue to go up until the American people impeach Bush inc. Note that one of the few states to add jobs in the current situation was Texas..guess why? So vote Republican again if you dare.

[underdogus]

The United States goverment is currently running a budget defecit of 1.8 Billion a day. To much defecit will create a weaker American dollar and cripple the US economy......

[bgwinnett]

The United States goverment is currently running a budget defecit of 1.8 Billion a day. To much defecit will create a weaker American dollar and cripple the US economy......

Posted by underdogus at 06:01 PM : Apr 07, 2008

Yeah, it can''t carry on falling and yet remain the Worlds reserve currency.

[scottyusa]

I was born in the 50s. Life was so much better then. The middle class was huge and everybody really could realize their dreams with a little effort. All we really had to worry about was a nuclear bombardment that would change the world as we knew it. Ah life was so simple back then......

[randynason]

Thank you, George W. Bush, for making all that is ill with the world so painfully obvious, even for those that prefer to bury their heads in the sand. Your legacy is intact, as the absolute worst president this country ever had, or ever will have. You''re #1, in that respect, pink monkey-man.

[Syndicate]

If you had to walk thirty miles carrying all your groceries how much would you pay for a ride. $5, $10 maybe $20. Even at $5 a gallon gas is cheap. Especially when you consider cars get a lot better milage than they use to.

[trishab4]

I was born in the 50s. Life was so much better then. The middle class was huge and everybody really could realize their dreams with a little effort. All we really had to worry about was a nuclear bombardment that would change the world as we knew it. Ah life was so simple back then......
--------------------------------------------------------------------------------
Posted by scottyusa at 06:21 PM : Apr 07, 2008

-we are of same generation. True what you said. Only for our pleasure and greed, many stood up against anyhting that did not look like our way of life, and we called it Anti-American. It reminded me of the experience where rats were left to lick a metal file, you understand that they were bleeding result of that licking, but they loved it, because they were tasting their own blood, all blood tastes good, ANY blood, including theirs... So you understand we were licking our blood at that time. I''m sorry to compare us to rats, but I''m afraid not to see the American Nation Die like the Rats did...

[bernardfeltzer]

High gasoline prices help stop crime.
The average person will be stuck at home cause he is existing in his crippled economy, while the free spending dope dealers will be driving around all the time delivering drugs and looking for new customers.
Cars and Cadillac Escalades with flashy wheels are easier for cops to spot.