Steve Quayle News Alerts

July 2, 2003

NEW YORK — U.S. gasoline supplies are full enough to get motorists through the summer vacation driving season without a renewed spike in prices, the U.S. Energy Information Administration said Wednesday.

"Even if the summer driving season does begin in earnest following the July 4th holiday, as possibly evident by the record 9.5 million barrel level of gasoline demand last week, supplies are expected to be adequate for the remainder of the travel season," the EIA said in its report This Week in Petroleum.

Gasoline stocks fell 3.2 million barrels last week as distributors filled their tanks ahead of the July 4 Independence Day holiday, according to the EIA, the statistical arm of the Department of Energy. Stocks are below the low end of the normal seasonal range.

Even so, price gains are being tempered as gasoline imports to the United States so far this year are more than 11 percent above the same year-to-date period last year, the EIA said.

"Recent strong import levels have contributed to a slight upward movement in gasoline inventories," the EIA said.

Regular U.S. gasoline prices are averaging $1.487 per gallon, 24.1 cents per gallon lower than the record high of $1.728 cents per gallon reached on March 17, 2003 in the first days of the U.S-led war on Iraq.

"The prospect of July or August prices approaching the March peak is very slim, " the EIA said, forecasting that retail gasoline prices will remain flat, possibly trending downward in some regions, in coming weeks.

"Barring major infrastructure problems, any significant retightening in the gasoline balance is likely to result in only a modest seasonal increase from current levels," the EIA said.

Prices could rise if the U.S. economic recovery strengthened, the EIA said.

"The key to a robust gasoline market this summer will primarily hinge on a genuine rebound in economic activity that would provide the needed boost in consumer spending and travel," it said.

http://www.foxnews.com/story/0,2933,90968,00.html