Friday, November 19, 1999

Crude oil prices climbing steeply

Look out for higher costs down the line

The Cincinnati Enquirer

        Crude oil prices climbed to their highest level since the Persian Gulf War on Thursday. It's an increase that, early next year, will mean steeper gasoline prices, possibly surcharges on plane tickets and higher costs on products ranging from plastic goods to anything that's shipped.

        Oil rose as high as $26.80 a barrel on the New York Mercantile Exchange, the highest since January 1991 when the war drove it to $32. Profit-taking ultimately pushed it back to $25.80 by day's end.

        The higher prices for gasoline are no surprise to Patricia Spradlin of Covington, who has watched gasoline prices creep up over the past year but feels powerless to do much about it.

        “You still have to go back and forth to work,” she said. “It doesn't matter how much gas is. I don't understand how one day they can sell gas for $1.10 and the next day, it's $1.30,” she said.

        She and other motorists had better get used to it.

        The American Petroleum Institute said this week that U.S. crude oil inventories fell by 2.5 million barrels in the latest week to 309 million barrels. That extends a rapid draw-down in U.S. oil supplies as major oil producing nations in the Organization of Petroleum Exporting Countries have cut back and demand for oil has increased.

        The average price of unleaded regular gasoline has jumped 35 percent in Greater Cincinnati since last year, according to Oil Price Information Service, a New Jersey company.

        The average price at more than 40 area stations was $1.34 this week vs. just over 99 cents a year ago, a spokesman said.

        A price of $30 a barrel for crude oil, unthinkable when it bottomed out at $11.26 last February, now is possible by year's end.

        “At around $30 a barrel, you're probably looking at a nationwide average of at least $1.50 a gallon for gas,” said John Kilduff, senior vice president for Fimat USA, a New York futures brokerage firm.

        The Associated Press contributed to this report.


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