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Saturday, July 10, 2004

Expect higher fuel prices to last till winter, U.S. says



By Justin Fenton
Enquirer staff writer

Gasoline prices are on the rise anew - and now the government says they're unlikely to ease until after fall.

The federal Energy Information Administration (EIA) this week increased its prediction for the cost of a barrel of crude oil. It also said it expects the national average price of gasoline will remain at $1.89 a gallon until the winter.

The cost of gasoline in Southwest Ohio and Northern Kentucky rose this week to the same levels as a month ago.

The average price of a gallon of unleaded gasoline in Northern Kentucky was $1.90 Friday, surpassing the national average of $1.88, according to the Oil Price Information Service. In Southwest Ohio, the cost was $1.81 Prices in both areas are up more than 40 cents from a year ago.

Crude oil prices closed just below $40 a barrel Friday. They are prone to spiking because of Middle East instability, the threat of terrorism and low inventories, the EIA said.

The agency had said in April that prices could fall to $30 a barrel by the end of the year. That prediction was boosted to $33 last month, and the agency this week suggested that $37 a barrel might be the norm for the next year and a half.

Tom Kloza, publisher of "Oil Price Information Service," an independent newsletter that covers the industry, expects the national average price to flirt with $2 for the next couple of weeks.

But he also thinks the end of the year should be more favorable to motorists, when gas is easier to produce (because reformulated fuel isn't needed to curb air pollution) and demand is down.

---

E-mail jfenton@enquirer.com




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