If you thought gasoline prices were scary on Halloween, just wait until Thanksgiving or Christmas.
By then, if close watchers of oil and gasoline markets are right, prices could be close to the record levels set in May. “You could be paying that by the time you sit around your Christmas tree,” said Stephen Schork, publisher of The Schork Report, a daily energy newsletter.
And when warmer weather comes back in 2008, a march toward $4 a gallon isn’t out of the question, Schork said.
For motorists using diesel, that future is now. On Friday, the average price of diesel in the Seattle-Bellevue-Everett area was a record $3.71 a gallon, according to AAA. Diesel prices have run well above gasoline for months.
For regular unleaded in Snohomish County, the average price Friday was $3.19 a gallon, up 25 cents from a month ago and 75 cents higher than a year ago.
It could be worse.
“All things being equal, we should have expected our prices to be higher by now,” said Janet Ray, spokeswoman at AAA’s regional office in Bellevue.
That’s because crude oil, which makes up close to half the price of a gallon of gasoline, is closing in on $100 a barrel, up nearly 40 percent since late August.
“Crude oil prices have been moving higher nonstop since mid-September,” Schork said.
On Friday, oil futures on the New York Mercantile Exchange hit $95.93. That’s also just a few dollars short of the all-time, inflation-adjusted high for crude oil set in 1980.
In May, crude oil was selling for well under $70 a barrel when gasoline in the U.S. hit new highs. At that time, gasoline in the Puget Sound area peaked at an average price of just under $3.47 a gallon.
Thus, Ray said, we can be thankful we haven’t set new records yet at the pump based on how high crude oil is now.
Part of the reason is that overall demand for gasoline in November doesn’t usually match demand during the late spring and summer months. That’s why the past pattern was for gas prices to ramp up from March to May, peak in the summer, then slowly slide to annual lows as winter starts.
They have followed that pattern less and less in recent years, however. Pressures including war in the Middle East, fast-growing demand for oil and gasoline in China and speculation in oil futures have helped to drive up prices.
During that time, U.S. demand for gasoline and oil also has grown, stretching the nation’s refining capacity to the limit, so any problem or seasonal switch in production of fuel blends can affect gasoline supplies and prices more than ever, Schork said.
As of last week, U.S. crude oil inventories fell to 7.5 percent below the year-ago levels, the federal Energy Information Administration reported.
Unless rising prices dramatically curb people’s demand for gasoline, Schork said, holiday travel will likely keep prices relatively high. He said the nationwide average, now at $2.94, could top $3.10.
Brian Couch, who oversees the service station at Donna’s Travel Plaza in Marysville, said he hasn’t noticed any slack in sales. His station, which sells huge amounts of diesel to commercial truck drivers, is more affected by economic slowdowns than fuel prices, he said.
Based on indicators he’s seeing, he also doesn’t expect diesel or gasoline prices to ease much.
“All my reports are saying crude stocks are falling left and right,” Couch said.
What does all this mean for next year? Schork said he isn’t prone to wild guesses, but he won’t rule out passing the $4-per-gallon mark around here.
“Five dollars (a gallon), I think, is absurd,” he said from his office in Pennsylvania. “But I don’t think $4 is out of the realm of possibility.”
Reporter Eric Fetters: 425-339-3453 or firstname.lastname@example.org