For the second straight day, oil futures rose above $100 a barrel Thursday after the government reported a larger-than-expected decline in crude oil inventories and an unexpected rise in heating oil costs.
In the Baltimore area, gasoline prices held at about $2.98 a gallon Thursday, according to AAA?s Fuel Gauge Report, but officials said an extended run of $100-a-barrel pricing would eventually affect consumers at the pump.
“One hundred dollars is a magical figure, but it isn?t any more dramatic than $90,” Joe Petrowski, CEO of Gulf Oil, told The Examiner. “Now that we?ve reached $100, it would not surprise me if it reached the $110, $120 price range.”
Crude oil cost increases take about a month to affect prices at the pump, because gas currently in underground storage tanks has already been paid for, according to AAA Mid-Atlantic.
“This rise in crude oil price sets a terrible precedent for motorists,” said Ragina Averella, AAA Mid-Atlantic?s manager of public and government affairs. “If these high prices continue, they will hurt motorists ? and all of us ? in many more ways than just at the gas station ? from higher consumer prices for everything from higher airline and cruise prices to higher cab fares.”
Speculation about falling stockpiles of crude oil in the United States, increased international demand, especially in Asia, and the weakening of the U.S. dollar have all caused the price of oil to surpass $100 a barrel, Petrowski said.
Petrowski said he could see some relief coming in the second half of 2008, though decreasing supply would mean oil would likely never fall below $60 to $70 a barrel.
“What this is going to do is make us focus even more on renewable fuels like ethanol and biodiesel,” Petrowski said.
Prices have been volatile in recent days due to low holiday week trading volumes. That means some of the price moves, including Thursday?s record, may be exaggerated.
“We?re still in a little bit of a holiday trading lull,” said Tim Evans, an analyst at Citigroup in New York, who added that volumes on Wednesday ? when oil first reached $100 ? were 72 percent of normal.
The Associated Press contributed to this article.
