• Print
• E-Mail

NEW YORK - Stable gasoline prices over the last two months have shielded U.S. consumers from the impact of galloping crude oil prices, but drivers will face more pain at the pump if the cost of crude remains high into next spring.

Retail gasoline prices have held in a tight range around $2.80 a gallon nationwide over the past two months amid a normal seasonal slowdown in road travel, even as the cost of crude oil has surged about 14 percent over the same period to a record over $85 a barrel.

The stability in gasoline prices prompted U.S. Energy Secretary Sam Bodman last week to describe the U.S. economy as "remarkably resilient" in the face of surging oil prices.

But analysts expect gasoline prices could rise to a never-before-seen $3.50 or $4 a gallon if oil prices hold near current levels into next spring when drivers hit the roads in greater numbers. That could further strain consumers already facing a housing slowdown.

"Thus far we've been relatively insulated from the effect of higher crude prices by the narrowing of spreads (between crude oil and) refined products," said Richard DeKaser, chief economist at National City Corp in Cleveland, Ohio.

"If those spreads revert to normal and crude oil prices remain high there is going to be a definite retail impact."

As of Friday, crude oil futures (CLc1: Quote, Profile, Research) were up by over 14 percent since August 15, driven higher by expectations of tighter supplies in the winter amid ongoing production restraint by OPEC. However gasoline futures (RBc1: Quote, Profile, Research) have lagged crude oil, rising only 3.8 percent over the same period.

As a result, the spread between gasoline and crude oil has shrunk to $3.88 per barrel as of Friday, compared with over $20 for much of last summer and a peak $37.76 per barrel in mid-May -- when extensive refinery outages cut deeply into U.S. fuel inventories.

The potential surge in gasoline prices at the end of winter would come at a time when U.S. consumers are already facing a declining housing market in many parts of the country.

Higher energy prices probably will cut further into discretionary spending, even if energy prices have yet to gobble up as big a proportion of household budgets as they did in the 1970s energy crisis.