BOISE – High crude oil prices, political violence in Venezuela, and OPEC's decision to cut output may push U.S. gas prices to new record highs as early as this week, according to AAA Idaho.

Based on AAA's Daily Fuel Gauge Report (www.fuelgaugereport.com), Idaho and U.S. average prices for self-serve regular gasoline are $1.71. The U.S. average price is just pennies short of record levels set last August 30, when the average mark hit $1.734.

Idaho's all-time mark is not in immediate jeopardy of being eclipsed. Idahoans paid an all-time average high price of $1.837 on September 4, 2003.

“A variety of factors largely tied to supply are putting pressure on pump prices,” said AAA Idaho spokesman Dave Carlson. “Crude oil futures closed at $36.74 per barrel yesterday at a time when the economy is beginning to expand and we're consuming more petroleum-based products.”

Since January 1, U.S. prices have risen 23 cents. Idaho's prices, which were already a dime or so higher then, have risen about 12 cents during the same period.

The run up in crude prices – at the highest mark since March of last year when oil traded at a high of $39.99 prior to the start of the war with Iraq – is largely to blame for higher pump prices that already average $2.17 in California.

The travel organization said a renewal of political violence in Venezuela, accompanied by threats by that country's president to cut oil and gasoline shipments to the United States, is also a factor in higher prices. The timing of that violence, along with OPEC's decision to trim one million of barrels per day starting March 1, will put more pressure on pump prices. In addition, another 1.5 million barrels are scheduled to be cut starting April 1.

Last week, a ship that sank in a channel of the Mississippi River contributed to higher gasoline prices throughout the Southeast and Midwest. Though a temporary problem, Carlson said the event illustrates how fragile the U.S. gasoline distribution has become and will remain for the foreseeable future.

---

By James R. Healey
USA TODAY
Nationwide, a gallon of unleaded regular averaged $1.705 – 3.2 cents less than the record set last Aug. 30, motorists' club AAA reported this week. Ten states were within 3 cents of their average highs, close enough that they could set records by midweek.

Motorists face climbing prices for another two or three weeks, forecasts Fred Rozell, gasoline expert at Oil Price Information Service. "We'll probably break the record nationally Friday," he predicts.

The climb has put both the government and private groups on alert for price gouging. The Department of Energy said that "spikes in gasoline prices are always of concern and something the Department of Energy monitors very closely."

Motorists who think they've been charged unfairly high prices can report to the government at 800-244-3301 or gaswatch.energy.gov. The Federal Trade Commission investigates complaints of price-gouging.

"We're concerned about prices going so high this early in the year," says Geoff Sundstrom, spokesman for the national AAA organization. "Our sense of it is that, for the short term, prices are going to continue going up." He won't predict how high, though, because "forecasts about high prices can become self-fulfilling" as stations raise prices because motorists are expecting it.

Prices are rising on fears of shortages and in response to consistently high prices for crude oil from which gasoline is made. Crude oil makes up 48% of the price of gasoline.

West Texas Intermediate crude, the U.S. benchmark also called light, sweet crude, was $36.66 a barrel for April delivery at the close of New York trading Tuesday, down 20 cents from Monday. Oil prices have been higher than that only 33 times in the government's 20-year database. The record: $40.42 in 1990, equivalent to $57.27 today, adjusted for inflation.

Petroleum traders feared shortages after a shipping accident Feb. 21 blocked traffic on the lower Mississippi River, halting gasoline barges trying to get into the Gulf of Mexico and on to Florida. The Coast Guard reopened the river to partial traffic quickly.

"A few stations around Tampa ran out of unleaded, and the terminals were nearly out, but it was a matter of hours" until supplies were normal again, says Tom Kloza, oil analyst at OPIS.

"We've asked all the AAA clubs to keep a sharp eye and report any outages, and we've been in touch with the Department of Energy to share information" if regions run out of gas, Sundstrom says.

The U.S. Energy Information Administration said in recent report: "Gasoline inventories are below the normal range for this time of year, meaning that should problems occur, there is little available supply immediately on hand either to meet increased demand or to respond to refinery, pipeline or other infrastructure problems that may occur."