The development of ethanol producing facilities is expanding very
rapidly in the USA. Some 200+ plants have been built or are under
construction, at least 40 more on the drawing board.
On Sat, 1 Mar 2008 20:10:25 -0800 (PST), indiaBPOking
<indiabpoking@[EMAIL PROTECTED]
> wrote:
>http://news.cincinnati.com/apps/pbcs.dll/article?AID=/20080301/BIZ/803010340/-1/CINCI
>
>Record prices expected by spring
>
>Gasoline prices, which for months lagged the run-up in the price of
>crude oil, are rising quickly, with some experts saying they will hit
>a record - or even climb to $4 a gallon - by spring.
>
>The increases could not come at a worse time for the U.S. economy.
>With growth slowing, high energy prices that were once easily absorbed
>by consumers are now more likely to act as a drag on household
>budgets, leaving people with less money to spend elsewhere. These
>costs could worsen the nation's economic woes, piling an energy shock
>atop the turmoil in credit and housing.
>
>"The effect of high oil prices today could be the difference between
>having a recession and not having a recession," Harvard economist
>Kenneth S. Rogoff said.
>
>Economists say energy's share of Americans' disposable income is
>slowly creeping up again. In December, that figure reached 6.1
>percent, the highest level since 1985. The increase of 2 percentage
>points - amounting to $200 billion - is a huge sum, a little less than
>half what Americans spend each year on new cars and automobile parts.
>
>"You're adding an oil shock on top of a crunch on credit and a housing
>collapse," Nigel Gault, an economist at Global Insight, said. "Even
>the U.S. economy cannot withstand all of that at the same time."
>
>A growing number of economists and energy specialists are predicting
>that as demand for gasoline picks up further this spring and summer,
>retail prices will surpass the high of $3.23 a gallon set last
>Memorial Day weekend. That high fell short of the inflation-adjusted
>record of $3.40 in today's money that was set in 1981.
>
>Friday's national average price of $3.15 was less than a dime off the
>national record set May 25. The records for Southwest Ohio and
>Northern Kentucky that day were $3.41 and $3.38 respectively,
>according to the Oil Price Information Service (OPIS).
>
>Jim Brock, an economist at Miami University in Oxford, Friday
>estimated that there was a 50-50 chance that gasoline prices could hit
>$4 a gallon this year.
>
>"Gas price predictions are a very dangerous thing, but given where we
>are now and what's happening, it's possible," he said.
>
>Brock acknowledged that while speculation has pushed crude oil prices
>above $100 a barrel, oil companies are now pu****ng those higher prices
>through to consumers.
>
>He isn't alone in a gloomy *****sment of what will happen to prices at
>the pump.
>
>"Taking both gasoline market conditions and crude oil prices into
>account, it is still likely that we will see gasoline prices peaking
>at a higher level this spring and summer than we did in 2007," the
>Energy Information Administration, the public information and
>forecasting arm of the federal Energy Department, said Wednesday in
>its publication "This Week In Petroleum."
>
>Prices last summer were pushed higher by an unusually high number of
>refinery problems and shutdowns that created tight supplies, the
>agency said. Refinery woes seem unlikely to be "as numerous or long-
>lasting as last year," the agency said, adding that gasoline stocks
>nationally are already 5 percent, or 12 million gallons, higher than
>this time last year.
>
>But there are new problems in 2008, primarily crude prices that are
>$40 a barrel higher than this time last year. In addition, high gas
>prices this winter have cut demand - but only by 1.1 percent,
>according to Energy Department data.
>
>The agency, which is forecasting a high gasoline price of $3.40 a
>gallon, projects that crude prices won't go below $85 a barrel anytime
>before the summer.
>
>Other analysts agree.
>
>"Crude prices still appear to be excessive, but excess can persist for
>many months in any market that features lots of speculation,
>investment, and 'spin' of the news to accommodate the desires of those
>who believe that oil is a safe house for money," OPIS analyst Tom
>Kloza wrote on his oil and gasoline blog this week..
>
>Gas prices "have consistently been around 75 to 80 cents a gallon
>above 2007 levels in the first 59 days of 2008," Kloza continued. "If
>that edge is maintained, we could expect that a $4-a-gallon national
>average might be reached in late May.
>
>"$3.50 to $3.75 a gallon is the more likely target."
>
>For a decade, rising oil prices have failed to dent global economic
>growth. In the United States, consumers absorbed the higher costs,
>thanks to easy credit and rising prosperity, while in developing
>countries, government subsidies helped ease the pain. The rise in
>energy prices was a result of growing demand around the world.
>
>The price of crude has quadrupled in six years, and the close Friday
>of $101.84 was not far below the inflation-adjusted all-time high set
>in April 1980, after the Iranian revolution. That record, $39.50 a
>barrel, equals $103.76 in today's money.
>
>American consumers have responded belatedly by cutting back on their
>energy use. Oil demand in the United States grew by just 0.4 percent
>in 2007 and is expected to be flat in 2008.
>
>But global oil demand is still expected to be up an average 1.4
>million barrels a day this year, analysts estimate. That growth, from
>China and the Middle East, might help keep prices up, whatever happens
>to the American economy.
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