Monday, December 18, 2000

Low gas prices won't last long

By James Pilcher
The Cincinnati Enquirer

        Gasoline prices in the Tristate are nearing a one-year low just in time for the holidays, but oil industry analysts say it won't last.

        “By late next spring or early next summer, gas will probably shoot back up over $2 somewhere, maybe everywhere,” said Tom Kloza, publisher for the Oil Price Information Service Energy Group's weekly newsletter, which tracks industry trends and gas prices.

        “What we saw last summer is a template for seasonal demand for oil products every year, as we're seeing this winter with home heating oil prices.”

        Last summer, prices spiked across the Midwest, with a gallon of regular unleaded costing more than $2 in cities such as Cleveland, Chicago and Milwaukee.

        Cincinnati peaked at $1.91 on June 20. Currently, the Tristate average is $1.37, close to the year's low of $1.35 on Aug. 15.

        But as the weather warms and more people drive, demand is expected to increase, stressing an already maxed-out refining and distribution system.

        “Our system is suffering from arterial sclerosis, and the arteries are hardening,” said oil analyst Phil Verliger. “Now we've got smaller companies buying refineries, and they're ill-equipped to handle it, meaning more breakdowns are likely.”

        Added Mr. Kloza: “Don't delude yourself into thinking that these prices will still be around when Easter hits. It's not going to happen, and if anything, this coming year might be worse than last.”

        Holiday drivers catch break; fliers face headaches
Tips for air travelers
Tips for road travelers

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