I paid 55 bucks to fill up my car this weekend. That’s only going to cover 3/4 of a tank soon. Looks like it is time to bulk up on Oil Company stocks. That will more than cover the increased gas expenses.
April 23 (Bloomberg) — Whether it’s $50 to fill up your Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is coming to a pump near you.
Fuel prices are rising at a pace not seen since Hurricanes Katrina and Rita knocked out a third of the U.S. oil refining industry in 2005. Gasoline consumption is climbing twice as fast as last year and will accelerate when summer travel begins late next month.
“What we’re surprised by is the increased demand,” said James Mulva, chief executive officer at ConocoPhillips, whose refineries from California to New Jersey produce 56 million gallons of gas a day, enough to meet 14 percent of the country’s needs. “Even though the price of gasoline is up, the demand is up,” he said in an April 12 interview in Houston.
Population gains and U.S. economic growth are causing an increase in fuel purchases, according to Orlando, Florida-based AAA, the nation’s largest organization for motorists. The U.S. economy will expand at a 2.4 percent annual pace in the second quarter, up from 1.8 percent in the first three months, according to the median estimate of 74 economists surveyed by Bloomberg. Gasoline use is rising almost 5 percent above the five-year average.
Americans are resigned to higher prices, says David Pursell, a principal with Pickering Energy Partners, a consulting firm in Houston.
“Last year, we had pump prices well over $3 for the summer and gasoline demand was up,” Pursell said in an interview. “Would $4 gasoline cause demand contraction? I think it will, but I also thought $3 gasoline would.”