Top Financial News Thu, 16 Mar 2000, 2:01pm EST U.S. Refiners Must Boost Gasoline Output for Summer Demand, Agency Says By Liz Skinner

U.S. Oil Refiners Must Reach 98% Capacity, EIA Says (Update1)

(Rewrites first paragraph and adds details in last paragraph.)

Washington, March 16 (Bloomberg) -- U.S. oil refiners aren't producing enough gasoline to replenish low inventories and will have to run at full throttle this summer to meet an annual surge in demand from motorists, the government said.

Refiners are now operating at 87 percent of capacity, compared to 91 percent last year at this time, said Energy Information Administration chief Jay Hakes. He said refiners will have to operate at 98 percent of capacity at some point this summer to catch up with demand. ``Because of tight stocks, we're skating on thin ice,'' said Hakes, whose agency is the statistical branch of the Energy Department. ``There is potential for regional run-ups in price this summer,'' especially in California.

Hakes said, though, that he doesn't expect gasoline shortages this summer.

Hakes said retail gasoline prices could reach $1.80 a gallon this summer, even assuming oil-producing countries increase output by about 2 million barrels per day above their current quotas. Some analysts have predicted gasoline at the pump going above $2 a gallon.

The American Automobile Association said this week that the U.S. national average price for regular unleaded gasoline was a record $1.543 a gallon. U.S. gasoline prices, though, are still among the lowest in the world, with France, Italy and the U.K. all paying more than $4 a gallon for unleaded gasoline because of heavy European taxes

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=5e6be69436490c510d96cac14c7ef171

-- Martin Thompson (mthom1927@aol.com), March 16, 2000