Oil and the Middle East go hand in hand in the American psyche, but civil unrest in Venezuela is at least partly to blame for a recent rise in local gasoline prices, analysts say.
That doesn't matter much to North Toledo's Joe Ruberto, who was pumping $1.489-a-gallon gas into his car yesterday on Alexis Road - not the mid-$1.20s price of two weeks ago.
“They've always got good excuses - war in the Middle East, refinery problems,” he said. “They're going to do what they want to do, and we're stuck. We just got to suck it up and pay it.”
Petroleum exports from Venezuela, which produces 13.5 percent of the United States' oil supply, have been virtually halted since early this month by a general strike that has shut down Venezuela's national oil-producing company. The strike is part of a broader nationwide labor protest against Venezuela's government.
Combined with the persistent threat of war in Iraq, the Venezuela situation has pushed the price of crude oil up by more than $5 per barrel since Dec. 2, said Jacob Bournazian, an economist with the federal Energy Information Administration in Washington. The EIA is the Department of Energy's statistical arm.
On the New York Mercantile Exchange yesterday, the price of crude for February delivery rose 23 cents to $32.72 per barrel - a two-year high. The wholesale price of gasoline there rose 0.28 cent to 93.25 cents a gallon, levels not seen since June, 2001.
Mr. Bournazian said pump prices could have risen sooner than they did, but marketers waited to see whether the strike in Venezuela would last long enough to affect world prices. The strike's impact on U.S. supply was delayed about a week, he noted, because that's how long it takes tankers to deliver Venezuelan crude oil to Gulf Coast refineries.
“Everyone was trying to hold the line, hoping it would blow over,” said Mr. Bournazian, who characterized the recent increases as a “market correction.”
“The wholesale price has been rising for several weeks,'' agreed Keith McIntyre, a vice president at TrueNorth Energy, a local gasoline wholesaler and retailer that operates a chain of Shell stations in Toledo.
Local pump prices last reached the high $1.40s in late September, when refiners blamed supply concerns associated with Hurricane Isidore's approach toward the U.S. Gulf Coast for price increases similar to those posted on the last two Thursdays at local filling stations.
Nationwide, the Energy Information Administration reported, the national average price of regular-grade gasoline was $1.401 per gallon as of Monday - 3.8 cents higher than a week earlier. Gas in the midwestern region, which includes Ohio and Michigan, was a penny cheaper than the national average, but the region's week-to-week increase of seven cents was the nation's sharpest.
“It's outrageous, but you can't do anything about it,” said Marlena Hinton of Toledo while filling up at the same Shell outlet.
A year ago, national and regional gasoline prices were at a long-term low as the U.S. economy took a nosedive following the Sept. 11, 2001 terrorist attacks. On Dec. 24, 2001, the EIA reported a national average price for regular gas of $1.072 per gallon, and a midwestern regional average of $1.086.
The Associated Press contributed to this report.
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