Gas prices keep climbing in Sierra

Lenore Rutherford, The Union Democrat

Some local station owners and employees reject the idea that soaring gas prices are solely the result of the Libyan rebellion.

Exports from the oil-rich nation have been all but shut down as political unrest expands, causing a spike in gas prices last week.

Prices started going up long before the rebellion, say those at Tuolumne and Calaveras county gas stations, although fears have intensified that world oil supplies could dry up if the current political unrest spreads to other oil-rich countries.

"A lot depends on whether the rebellions spread," said Cecil Sooter, who owns two Jamestown area gas stations.

Sooter said rising gas prices were a problem before the latest crisis,

and he thinks it's because of speculation in the commodities markets.

"We can't do much about what's happening in the Middle East," he

said, "but we could regulate the speculators. That would help."

Sooter said there is no real supply shortage worldwide, but

speculators who buy and sell contracts for future oil deliveries have

been causing prices to rise for a long time.

"It's not a supply issue from the crude-oil level, and it's not a

production or manufacturing issue," agreed Jeffrey Kitchell, of Nash

Chevron in Angels Camp. "The only thing left is the commodities

markets. The traders are driving the prices up."

Wayne Smith, who owns Twain Harte's only gas station, said the

wholesale price for deliveries to his station rose at least 10 cents a

gallon last week. Sooter and Kitchell cited similar price hikes.

A survey of 10 stations in the Sonora, Jamestown and East Sonora

areas on Friday showed prices for unleaded gas ranging between $3.49

and $3.79 per gallon.

Nationwide, the surge in oil, which peaked at $103.41 per barrel

for benchmark crude on Thursday, hit drivers across the United States.

Pump prices, already the highest ever for this time of year, shot up

11.6 cents per gallon for regular.

The national average price on Friday was $3.29 per gallon,

according to AAA, Wright Express, and the Oil Price Information Service.

Oil for April delivery wavered in a volatile trading day Friday on

the New York Mercantile Exchange before settling 60 cents higher at

$97.88 per barrel.

The Libyan rebellion has all but shut down exports from there, and

traders say it's hard to gauge how much world supplies - and prices -

will be affected as similar uprisings unfold in North Africa and the

Middle East, said the AP.

Analyst Stephen Schork said traders have already priced in a "fear

premium" of about $15 to $20 per barrel, but that premium could grow as

long as fighting continues, AP reported.

Contact Lenore Rutherford at lrutherford@uniondemocrat.com or 588-4585.

11829048
The Union Democrat
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