Steve Hargreaves, CNN, October 26, 2007
NEW YORK — With oil prices setting records over $90 a barrel – and $100 looking ever more likely – experts say there’s a good chance drivers will see $3 gasoline before the end of the year.
“Three dollar gasoline in this market is unavoidable,” said Stephen Schork, publisher of the industry newsletter the Schork Report. “At this rate, we’re going to see $4 a gallon.”
Crude oil prices have soared nearly 30 percent over the last month, mainly over fears that supply won’t meet demand, a falling U.S. dollar, and what some say is a high degree of speculative investment money.
But so far drivers have been lucky. The national average price for gasoline has risen barely one cent, going from $2.81 last month to $2.82 this month, according to the motorist organization AAA, although in many areas of the country gasoline is already over $3.
Analysts have said the relatively stable gasoline price is due to slack demand following the high-demand summer driving season.
$90 oil won’t kill the bull
But the relatively cheap gas prices are causing profit margins to slip for refiners, who have to pay top dollar for crude but aren’t passing along the extra costs for consumers, yet.