Saturday, August 05, 2000

Sporadic jumps in gas price don't appear to signal trend

By James Pilcher
The Cincinnati Enquirer

        Just when Tristate area drivers were becoming accustomed to some relief at the gas pump, prices shot up as much as 25 cents per gallon Friday morning at some stations.

        But analysts say that the spikes, which were more subdued or nonexistent elsewhere around Greater Cin cinnati, don't mean that prices are ramping back up toward $2 a gallon as they did in June.

        “There is probably some profit margin restoration going on,” said Tom Kloza, publisher of OPIS, an online newsletter covering the oil industry. “The same thing happened in Chicago, but it's not a nationwide trend or anything like that. These are just pop-up thunderstorms, and there's no front coming through.”

        In fact, Greater Cincinnati's average price of $1.35 Friday for a gallon of regular unleaded was unchanged from Thursday, according to a AAA Web site that tracks daily prices. A month ago, it was $1.68.

        A spot check of 45 area stations by the Enquirer Friday resulted in an average of $1.36.

        Friday's national average was $1.51 a gallon.

        But even though Thursday night into Friday morning is normally when stations “adjust” prices for the coming weekend, Mr. Kloza and other analysts were surprised to hear of the ups and downs Cincinnati experienced.

        For example, the Thornton's station on Princeton-Glendale Road in West Chester Township started the day offering regular unleaded for $1.19 a gallon at 6:30 a.m. At 9 a.m., that price was up to $1.43, and at 10:30 a.m. it had dropped to $1.39.

        Jim Deters, general manager of Thornton's, said their prices are decided by mandates from suppliers and some good old fashioned competitive pricing.

        “We do visuals at other stations in the area,” he said. “We drive onto the lots to make sure the price at the pump matches the price on the sign. Then, we set our prices a few cents lower.”

        Peter Beutel, an oil analyst for Cameron Hanover Inc., a Connecticut-based energy risk management company, said wholesale gas prices went up between 10 and 15 cents last week, and crude oil has been rising — hitting $30 a barrel Friday.

        Mr. Beutel said the market is reacting everywhere, but Cincinnati is the exception.

        “I've never seen anything like this ... 10 to 15 cents is one thing, but 25 cents is beyond the pale for me,” he said.

        Analysts say the downward trend forced by public anger over the previous price increases could be hitting bottom and bouncing back, bringing prices back into balance.

        Sarah Anne Wright, Kristina Goetz and Randy Dunham contributed to this article.



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