Tuesday, May 30, 2000 SCHUMER: GAS WILL HURDLE $2 BARRIER By ROOSEVELT JOSEPH

GOING UP: Gas is already over $2 in Chicago.

Gasoline prices are rising again and could pass $2 per gallon here by midsummer if there is no increase in the oil supply, Sen. Charles Schumer warned yesterday. "We are on the verge of another increase of oil and gas prices that will make the previous increase we went through look tame," Schumer said.

"I am calling on the president to sell oil from the reserves and bring prices for gasoline and home heating oil back to reasonable level."

Schumer, in a letter to Energy Secretary Bill Richardson, called on the administration to remind OPEC ministers of their pledge in March to increase production if the price of oil averaged more than $28 a barrel for 20 business days.

He said Friday marked the 18th straight day with prices above the $28 level - with the price now hovering around $30 per barrel.

"If OPEC does not increase production within the week, we should be ready to pull the trigger and release oil from our reserves," Schumer said.

"Our oil tank is running dry just as the summer driving season has begun. We could very easily have a repeat performance of last year, when families paid historic prices to heat their homes."

Schumer shared a letter from an oil expert agreeing that OPEC is constricting the output of oil.

John Kilduff, an oil expert from FIMAT USA, predicts New York area gasoline prices will peak at $2.25 per gallon at the height of the summer.

The national average now is $1.52 a gallon. But the price of gasoline has already passed $2 a gallon in some places, hitting $2.29 a gallon in Chicago this weekend.

"The brief drop in oil prices that occurred in April has dissipated," Kilduff said in a May 26 letter to Schumer. "Oil-producing nations need to increase their output to alleviate the current high prices and to avoid a reprise of the heating oil-price crisis experienced last winter."

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Schumer said a spike in gas prices "is not just a nuisance. It has become a crisis. It makes the cost of food and all other commodities go up. In fact, it sticks a dagger at the heart of our economy."

-- Martin Thompson (mthom1927@aol.com), May 30, 2000