- The Washington Times - Wednesday, June 23, 2004

Gas prices nationwide have dropped for the fourth consecutive week, but industry analysts say consumers should expect to see prices jump again as the summer driving season picks up.

The average price for a gallon of regular gasoline decreased about 5 cents nationwide this week to $1.94, after hitting a record in May at $2.06. Gas prices also fell in the Washington area to $1.98 from $2.01 last week. Average gas prices in the Washington area hit a record $2.05 on June 3.

Energy analyst Fadel Gheit credited the recent drop in gas rates to the declining prices of crude oil and plans by the Organization of Petroleum Exporting Countries to increase production.

But gas prices generally creep up 4 to 5 cents per gallon right before the Fourth of July and rise as much as 12 cents before tapering off in September, said Mr. Gheit, who works with New York brokerage firm Oppenheimer & Co. Inc.

Most of that expected increase will depend on consumer demand, said George Gaspar, an oil analyst at Milwaukee investment bank Robert W. Baird & Co. Inc.

Although gasoline demand was up 5 percent in April, there was little increase in May, which Mr. Gaspar attributed to more Americans cutting back on driving.

AAA Mid-Atlantic spokeswoman Sue Akey said more U.S. drivers are making road trips this summer than in the past summer. About 4 percent more drivers were on the road this Memorial Day weekend than in the similar period last year, according to the D.C. motorist organization.

Security concerns in the Middle East, especially over the transfer of authority next week from the U.S.-led coalition to the new Iraqi government, also will play a role in determining whether gas prices rise next month.

Additionally, a strike by oil workers since Friday in Oslo has reduced production for the world’s third largest oil exporter by 375,000 barrels a day. Norway may lose up to 15 percent of its daily production, which could raise gas prices further, Mr. Gaspar said.

The escalation of violence in Saudi Arabia and Iraq pushed up U.S. oil prices to a record $42 per barrel on June 1. About $15 of that price was tied to the “fear factor” that more terrorist attacks would disrupt oil production in the Middle East, Venezuela and Nigeria, Mr. Gheit said.

Oil prices, now trading at $37.53 per barrel, could fall $10 in the next six months if operations in Saudi Arabia and Iraq stabilize, Mr. Gheit said. That would bring the price of regular gas down by as much as 30 cents a gallon.

Mr. Gaspar forecast oil prices to drop $2 per barrel this summer because of increased U.S. inventory, taking 5 to 7 cents off the average gallon price for motorists.

“I think gas prices can stabilize where they are,” he said.

But Oxon Hill resident Keisha Jones said she is still cutting back on her commutes to the District because of the gas prices, which are up 44 cents nationwide from a year ago.

“You can find a little difference in the price depending on what side of town you are in,” but it still costs $30 to fill up her tank, Miss Jones said yesterday at the Stadium Exxon on Benning Road in Northeast. She spent $10 at the station.

Diane King, a Glenn Dale resident, also said that she is seeing little change in the price. Regular gasoline at the Exxon was $2.06 per gallon. Regular was a penny more at the Amoco station a mile away on Bladensburg Road.

“I haven’t cut back on my driving, but I am shopping around more vigilantly for a lower price,” Ms. King said.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide