Pricey Gas | Green Energy News

March 7, 2004 – Vol.8 No.50

PRICEY GAS.

The International Energy Agency (IEA), the world’s energy watchdog, said that the price of gasoline could reach record highs this summer. Lagging output from refineries, production cuts from OPEC countries, political instability in Venezuela, and surging economic growth in China are part of the blame.

The U.S. could see gas at the pump reach $3.00 per gallon, according to a number of news reports. Blame here goes to an up tick in the economy (people driving more), scheduled shutdowns at some refineries for maintenance, and an increased demand for fuel-hungry vehicles.

While production of cars built in North America - the U.S. Canada and Mexico - is down 10 percent for the year compared with last, the production of less fuel-efficient trucks is up a tick - one-half of one percent - according to Ward’s Automotive Reports.

OPEC has defended its cuts saying supplies are fine but the oil export situation in two member countries is beyond its control. Those countries are Venezuela and Iraq.

Sky-high gas prices have been predicted before, but have not always materialized. Analysts were then proved wrong or negotiations were made with OPEC nations to increase output. This year the situation is different. The U.S., as the occupier of the nation with the world’s second largest oil reserves, is in a prickly position to ask OPEC for mercy.

High oil prices - if realized and sustained beyond the summer travel period - could have an effect on the elections on November 2.