CRUDE AWAKENING: OIL PRICES HIT RECORD.

Byline: Brent Hopkins Staff Writer

Leaping into record territory, the average cost of a gallon of gasoline crossed $3 in Los Angeles on Wednesday, pushed by refinery woes and international intrigue.

Nuclear nervousness in Iran, unrest in Nigeria, unrelenting demand in China, India and the Middle East all combined to drive oil to a record $72.17 per barrel on the New York Mercantile Exchange on Wednesday. Since that's the major component of the cost of fueling up, experts see more woes for drivers' wallets in the near future.

After rising 35 cents in the last month, industry watchers believe a gallon of gasoline could shoot up another 25 to 30 cents in the next few weeks.

``It doesn't show any signs of slowing down at this point,'' said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California, which reported the $3 figure on its FuelGaugeReport.com Web site. ``It went up 2.5 cents overnight, which is pretty sharp. We think it'll be a couple more weeks of price increases before this lets up. This is going to make driving really expensive.''

And perhaps quickly, according to Andre van der Valk, who owns four local gasoline stations and serves as president of the Automotive Trade Organizations of California. He watched the spot price of gasoline shoot up 20 cents in a day on Tuesday, which invariably works its way into higher prices for drivers. At his Shell station in North Hills, he's charging $3.05 a gallon for regular and figures he could have to raise the price to nearly $3.20 at his two independent stations in Ventura.

At those prices, he's making around 10 cents a gallon, but worries about upsetting price-sensitive consumers.

``It's almost offensive to me,'' van der Valk said. ``When things occurred last year (after the hurricanes), the consumer could say, yeah I understand, but now people are teed off. They're walking in, saying things like, how dare they?''

In California, a combination of planned maintenance and unexpected refinery shutdowns made the always-precarious market even tighter in the last week. The state's Energy Commission reported Wednesday that refineries produced an average 854,286 barrels a day last week, off 10.3 percent from the previous week and 9.1 percent below the same period a year ago.

Even when production's back online, however, Energy Commission spokesman Rob Schlichting warned that consumers would have to cut demand to influence a drop in pump prices.

``I don't see them going down anytime soon, especially as long as crude oil keeps increasing,'' he cautioned. ``This is a time to be thinking of ways to save. If we can cut the demand a bit, that should help insulate us from those kinds of price increases. Not only do you help your wallet, you're helping the system.''

That help will need to come soon, according to Denton Cinquegrana, West Coast markets editor for the Oil Price Information Service, an independent market research company in New Jersey. He sees another 30 cents in increases before pump prices hit the ceiling, as drivers take spring trips and take advantage of good weather.

``Honestly, I hope I'm wrong, but based on where the spot market is right now, you're looking at $3.20 to $3.30,'' Cinquegrana said. ``When people say, enough is enough, I'm not driving any more, then prices will go down. There's no down side to conservation.''

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CAPTION(S):

photo, chart

Photo:

(color) A gallon of unleaded gasoline sold for $3.05 at two gas stations at Burbank and Sepulveda boulevards in Sherman Oaks on Wednesday.

Andy Holzman/Staff Photographer

Chart:

Across the Threshold

SOURCE: AAA fuelgaugereport.com

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