Area economists expect bigger pains at the pump ? but it could be worse

“It lags through the economy,” said Richard Clinch, an economist at the University of Baltimore.

Crude oil futures for December hit a high Wednesday morning of $98.62 per barrel on the New York Mercantile Exchange, before slipping to lower levels.

Meanwhile, the price at the pump nationwide rose overnight by .019 cents to $3.043 per gallon for regular gas. In the Baltimore metro area, prices rose .014 cents to an average of $2.938 per gallon, according to AAA.

Prices in the Baltimore-Washington area may reach $3.40 per gallon, said Robert Wasilewski, a portfolio manager with Baltimore-Washington Financial Advisors. The current increases in oil have only started to translate to the pump, he said, and it could be about a month before the current record levels hit local gas stations.

The spike in oil prices has been years in the making, as suppliers have struggled to increase production capabilities, according to Justin Perucki, an equity analyst specializing in oil and gas for Morningstar, a Chicago-based investment research firm. Perucki said gas prices may not rise as high as some have predicted.

“They?re two separate supply-and-demand markets,” he said. “Even though oil prices are high, it doesn?t always translate into high gas prices.”

Clinch added that the effect on the economy of higher gas prices has been much more contained than in the past, with the nation in recent decades turning into an information-based economy.

“Why isn?t this a disaster when it was in the 1970s? At that point we had a less fuel-efficient economy,” he said. “When we made steel, there were trucks and things, and that was more energy-intensive.”

Gas prices may go up, but Wasilewski said it could have happened at a worse time, with the big oil increases coming now rather than at the start of the summer driving season.

“It isn?t good if we have a real cold winter,” he said. “But it?s not as bad as if it was the summer.”

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