Coming soon to a gas pump near you: still higher oil prices, just in time for the summer driving season.
That's the prediction of many experts, despite last week's slight drop in the price of crude oil. After reaching nominal highs of more than $40 a barrel, prices eased to about $38 following OPEC's announcement that it would increase production by about 2 million barrels a day, and if necessary by an additional half-million barrels on Aug. 1. OPEC nations produce more than a third of the world's crude oil.
The promise of more oil from the Middle East was enough to roll back prices at the pump for the first time all year. Nationwide, Americans are paying an average of $2.04 per gallon for all grades of gasoline, according to the semimonthly Lundberg Survey, a drop of 6 cents per gallon. Prior to last week's decline, prices had soared by nearly 60 cents a gallon since mid-December.
Still, some analysts worry that prices will resume their rise over the summer. Production, after all, is just one factor in the complex formula for oil prices. Shipping costs have increased 50 percent this year, and new port security regulations that take effect on July 1 will disqualify some tankers from docking in the United States. And American refineries are already operating near full capacity, weeks before summer vacations push demand toward its annual high.