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Wednesday, March 09, 2005

Gasoline Prices to Hit Record Levels This Spring

Increased seasonal demand for gasoline -- on top of high demand that exists already -- is expected to drive gasoline prices up to record levels in the US, perhaps going as high as a national average of $2.15 per gallon.

The US Energy Information Administration estimates that gasoline prices will average about $2.10 throughout the spring and summer driving seasons -- up 20 cents from last season. The relatively strong economy is contributing to higher demand, and the high prices that are resulting.

The OPEC oil cartel plans to meet on March 16 to discuss future oil production. Saudi Arabia has been among the OPEC members arguing for higher production that would lower prices (not out of altruism, but out of fear of conservation measures that could lead to an oil glut and price crash like that seen in the mid-1980s).

Although $2.15 per gallon would be an undisputable price high in terms of whole dollars, the highest-ever gas prices, when adjusted for inflation, were reached in March 1981. Then, gasoline cost $3.08 per gallon in today's dollars.

Source: CNN (Netscape)