Residents of Michigan and the rest of the Midwest have grown used to large increases in gas prices over the summer.
But this year, the increases brought on by seasonal changes in travel have been joined by the United States interactions with Middle East oil producers.
AAA Michigan spokesman Jim Rink said motorists already have seen some of the results of OPEC management. Last week marked the fourth in a row that gas prices have risen - totaling 24 cents over the four-week period.
“This is sort of normal for this time of year,” he said.
Rink said the increases are a result of OPEC increases in crude oil barrel prices - up to more than $25 per barrel last week - but supply issues may become more important this summer.
And Rink said Michigan could get hit harder by supply issues than other states, because of the cost of shipping.
“The Midwest is hurt because of its geographic position,” he said. “We’re not close to refineries, we have to ship it in by truck or through a pipeline. So anytime you have a fire in a pipeline or something like that, we get hit harder.”
After its meeting in January, OPEC decided to limit production of crude oil to maintain prices - a move that is expected to last at least until the end of June.
“Just when we’re going to be needing it the most there won’t be as much there,” Rink said.
But Rink was quick to add the drop-off should not be overly drastic.
“There won’t be a shortage,” he said. “If there was a military action in Iraq, OPEC has said that it would make up for the lost Iraqi oil, so they’re willing to do what’s necessary to avoid a shortage situation. But that doesn’t mean that prices won’t get high.”
But there are still some wild cards, said Jeff Pillon, spokesman for the Michigan Public Service Commission and project manager of the annual Michigan Energy Appraisal.
The idea that military action could spread to Iraq is one issue that could affect oil production and transportation, Pillon said.
“The uncertainty regarding the current war on terrorism - that’s a question mark we’re going to have to live with for some time,” he said.
Despite the questions and the consensus that prices will increase, Pillon said this summer shouldn’t mimic the gas crunch of the ’70s.
“Supply will probably be OK,” he said. “There’s nothing that we’re seeing right now that will effect supply availability.”
But supply issues may be only one-half of Michigan’s gas drama this summer.
Tim Gill, senior analyst for the American Petroleum Institute, said supply has been decreasing over the last year but the strengthening economy could actually turn into an adverse situation for drivers this summer.
“We’re starting to see the economy pick up again after a slow period,” he said. “So that’s driving the demand for petroleum - not only gasoline but diesel - at the same time supply was pretty much shrinking over 2001.”
