Gasoline prices start to decline

April 5, 2000

BY ROBERT C. HERGUTH TRANSPORTATION REPORTER

Chicago area gasoline prices are slowly dropping from the record highs of last month, but whether they will continue their descent is anyone's guess.

An informal survey of local gas stations found that prices have either dropped by as much as a dime a gallon or stayed about the same in the last week.

"Since last week we've been down 8 cents, and we went down another 2 cents today," said Mike Raymondi, who owns the Dempster & Ozark Shell station in Morton Grove. A gallon of self-serve unleaded regular was selling for $1.60 there Tuesday afternoon.

Raymondi attributes the dip to lower wholesale costs, which are influenced by sinking crude oil prices and a drooping futures market, among other things.

"It's been going down 2 cents here, a penny there" over the last week, Raymondi said about prices in the area. "I think they're going to drop even more."

The Thornton's station on Roosevelt Road in Villa Park dropped 9 cents per gallon overnight last week, from $1.55 for self-serve unleaded regular to $1.46, said Jay Huitsing, a Thornton's official.

The price Sweeney Oil charges big customers like trucking companies was $1.56 for a gallon of unleaded regular on March 17, said Sweeney fuel pricing analyst Ron Brousseau. On Tuesday it was $1.52.

At the Niles Marathon, a full-serve station, the unleaded regular price has remained fairly steady at $1.64 per gallon, but "probably with the next delivery we'll be dropping our price a little bit," said owner Paul Rybski.

The long-term price outlook was once relatively predictable, he said. "But there's no rhyme or reason now. It's too hard to tell."

Last month the AAA-Chicago Motor Club reported record prices in Cook County, where the average cost for a gallon of self-serve unleaded regular was $1.661. That broke the previous record of $1.51 set in December 1990.

AAA's April fuel study isn't yet complete, but experts say prices in many areas have been dropping in recent days, especially since the Organization of Petroleum Exporting Countries decided on March 27 to boost oil production.

OPEC's decision to curb production last year was a main factor in the skyrocketing prices.

But even with more oil being churned out, prices may swing back up, said Philip K. Verleger Jr., an oil expert at Boston-based Brattle Group.

"All it's going to take is one or two refinery problems and all hell will break loose," he said. "We've got no inventories" to fall back on, so prices could jump again if there's any hitch.

Dave Sykuta, executive director of the Illinois Petroleum Council, thinks prices will fluctuate.

"But you have to wait and see if the production increase comes to pass," he said, adding that OPEC can be unpredictable. "I think it's going to be a roller coaster ride

http://www.suntimes.com/output/news/gas05.html

-- Martin Thompson (mthom1927@aol.com), April 05, 2000