Gasoline

U.S Energy Dept warns of summer gasoline shortage
Reuters, March 9, 2000

WASHINGTON- The U.S. Energy Information Administration (EIA) repeated Thursday its warning that U.S. gasoline stocks are in a precarious position for this summer, and indicated pump prices could average $1.80 a gallon across the country. "EIA expects to see high refinery utilization rates on top of precariously low gasoline stocks. This combination leaves little room for the unexpected," said John Cook, director of the EIA's petroleum division, in testimony at a congressional hearing. "Unplanned refinery outages, import delays or demand increases can create price surges above levels shown in the EIA forecast." The EIA, the statistical arm of the Energy Department, is currently projecting U.S. retail gasoline prices will peak at $1.56 per gallon this summer. But price volatility could result in a 20-25 cent per gallon price surge, bringing the average price to $1.80 "for a time," the agency said.

The EIA made similar projections earlier this week, which ignited new demands in Congress for the Clinton administration to release oil from the Strategic Petroleum Reserve. The president has repeatedly said he prefers to try energy diplomacy with OPEC members first, before selling any crude from the nation's emergency stockpile. U.S. energy prices have soared in recent months due to output curbs from the Organization of Petroleum Exporting Countries and key non-OPEC producers. The rising crude oil prices have sent both home heating oil and gasoline prices soaring to historically high levels. Cook told lawmakers that on top of the current low stock situation in the United States, refineries needed to increase crude inputs by over one million barrels per day in March and April at a time when the world market is short of crude oil. That is virtually certain to trigger more volatility in gasoline prices this spring, he said.