As gas prices rise, Americans cut back
As signs show a steady rise — this one at a Gulf station in Holtsville earlier this week — oil company profits soar. Crude was $112.76 a barrel Wednesday. (April 25, 2011) Credit: Newsday/Thomas A. Ferrara
American drivers used less gasoline last week, but prices went up again Wednesday from a week earlier -- by 5.8 cents on Long Island to an average of $4.159 for regular, according to the AAA.
Drivers are apt to be even more irritated Thursday morning if, as forecast, oil giant Exxon-Mobil reports that its profits rose 55 percent to $9.8 billion in the first three months of this year compared with the year-ago period.
The financial information company FactSet, headquartered in Norwalk, Conn., forecasts that the largest U.S. oil company and its rivals -- Chevron and ConocoPhillips -- will report a combined near-record profit of $18.2 billion for the quarter, up 40 percent from the first three months of last year. ConocoPhillips reported Wednesday, and Chevron is scheduled to report Friday.
The American Petroleum Institute, the oil industry's major trade group, has defended its members' profits, claiming that the margin of profit relative to sales is about midpack among major industries.
Experts have blamed a variety of factors for the increases in crude oil and refined products prices, including most recently an estimated $20 to $25 a barrel "fear premium" based on the possibility that political unrest in Libya, Syria and other North African and Middle Eastern nations will spread to major oil producers such as Saudi Arabia.
"The bombs are still falling in Libya, and it may be years before we get that oil back on the market," said energy analyst Phil Flynn of the brokerage PFGBest in Chicago, who thinks pump prices could rise 10 to 20 cents more by Memorial Day.
About the only positive news for Long Island consumers Wednesday was that, with the arrival of warm temperatures, the average price of home heating oil for Nassau and Suffolk finally stopped increasing; it fell by 3.4 cents in the two weeks ended Monday, according to the state Energy Research and Development Authority.
MasterCard's latest weekly report on purchases of gasoline by all methods of payment, issued Tuesday, said that American motorists, reacting to soaring fuel prices, used about 2 percent less gasoline in the past four weeks than a year earlier.
With Bloomberg News
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