Factors in place for $3 a gallon gas....
China's hunger for imported oil, scanty global inventories of crude, and political unrest in petroleum-rich Venezuela could combine to drive gasoline prices higher this summer, the International Energy Agency has warned.
Oil output from OPEC producers has lagged behind the growth in demand in China and other parts of Asia, squeezing oil inventories that already stood at historically low levels. Refiners, meanwhile, are adding to a squeeze on gasoline supplies by planning to shut down their plants for routine maintenance as sales of home heating oil ebb in the Northern Hemisphere, the agency said in its monthly oil market report.
These constraints suggest that energy markets face an unusually volatile transition as they shift their focus to gasoline before the peak summer driving season in the U.S. and Europe. "The current market is more fragile than normal,'' the IEA said. The Paris-based agency is the energy watchdog for a group of rich oil-importing nations.
Although the IEA analyzes the supply and demand for crude, it avoids what it considers the politically sensitive task of trying to predict prices. However, some analysts foresee misery at the pump for motorists this summer.
"Gas prices in the U.S. do stand a good risk of setting new records. How long these prices will stay high, no one knows," said Jan Stuart of FIMAT USA, a New York brokerage.
The U.S. demand for gasoline should surge if the economic recovery gathers pace, and Stuart said he sees quite a good likelihood' of gas selling for as much as $ 3 a gallon.
