Spike in Fuel Prices Anticipated
Crude oil prices appear to be holding steady, and speculators are betting on strong updrafts in early 2004 gasoline prices. The futures numbers of more than 90 cents per gallon reflect a conviction among large money funds and other "high rollers" that price spikes will occur sooner rather than later. However, there has been a tradition of false starts for rising prices in winter gasoline blends for the last five years. Last year, the buildup to the war in Iraq made the first quarter an expensive one at the pump. This year, growing hype about new fuel specs and sluggish imports could do the same.Marketers who sell diesel may get a price break, however. Some believe diesel values are 5-8 cents per gallon higher than what is sustainable for a mild winter.There’s a good chance that January will buck the past year’s overall trend and find refiners building inventories in this low-demand period.