Tuesday, April 22, 2008

Is this what "peak oil" looks like? Oops, yeah!

Same sad story: Oil and gas prices hit another record

By James R. Healey, USA TODAY

Oil and gasoline prices continued Tuesday to set all-time highs — with oil topping $118 a barrel and gas reaching $3.511 a gallon.

Responding to concerns over supplies from some key producers, light, sweet crude for May delivery rose as high as $118.05 a barrel in electronic trading on the New York Mercantile Exchange, eclipsing Monday's all-time high of $117.83.

By the afternoon in Europe, the contract had eased to $117.51, up 3 cents on Monday's close of $117.48 a barrel. The May contract expires at the end of trading Tuesday.

The AAA and the Oil Price Information Service reported a U.S. gasoline average of $3.511 Tuesday.

The U.S. Energy Information Administration, which use a different method, said Monday that the average price for regular gasoline across the USA was a record $3.508 a gallon Monday, eclipsing the inflation-adjusted peak of $3.413 set in March 1981 — $1.417 back then.
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The two surveys emphasize what Americans already know: However the price is measured, fuel is more expensive than it's ever been.

HOW ARE GAS PRICES AFFECTING YOU?: E-mail your story with your name and a daytime phone number.

Drivers are cutting back. Gasoline sales have fallen 2% to 11% a month since December in a study by 13 owners of stations scattered across the USA that are not direct competitors, says Jay Ricker, a member of a study group. He's president of Ricker Oil, which runs 30 Marathon and BP stations in Indiana.

"People aren't getting used to these prices," he says. "I'm hearing more comments, people saying, 'I need to get a more fuel-efficient car next time.' "

Expect no relief. EIA predicts regional averages as high as $4 in the next few months. And the price of crude oil, which EIA says accounts for about 72% of the gas price, continues to zoom. It closed Nymex trading Monday at a record $117.48, up 79 cents from Friday.

Americans already were feeling pinched, according to a USA TODAY/Gallup Poll five weeks ago, when gasoline averaged about $3.28. About 63% said fuel prices were a hardship. That's the biggest percentage recorded since 2005 by the poll, which has asked the question since February 2000.

The exceptions: 69% in late August 2005 and 72% in September 2005, when Hurricane Katrina disrupted oil production in the Gulf of Mexico. It made landfall in Florida on Aug. 25 and sent gasoline to a then-record $3.069 weekly average by EIA's Sept. 5 report.

The prices also have made big SUVs hard to sell — both for automakers and for owners who want to trade down.

Average prices for full-size SUVs in March tumbled 15.4% from a year earlier at wholesale auctions where dealers buy and sell vehicles, and large pickups were down 12.6%, after adjustments for miles and other factors, according to Thomas Webb, chief economist for Manheim Consulting, a unit of the company that operates many big auctions.

Vehicle auction prices overall were down 5.6% in the same period, he says.

The collapse of big trucks and today's tougher credit standards are savaging new vehicle sales. April sales will fall to a seasonally adjusted annual rate of just 14.7 million, down from 16.2 million a year ago, forecasts Itay Michaeli, analyst at Citigroup Investment Research.

Original article posted here.

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