Costly gas prices forcing Utah drivers to shift gears

For the first time in a decade, the number of Utahns who are traveling 50 or more miles over the Fourth of July weekend has dropped a bit — down 0.8 percent from last year.

About 400,000 Utahns will travel over July Fourth. It is the second holiday this year during which traveling will have dropped. On Memorial Day, travel decreased 0.1 percent, according to surveys commissioned by AAA.

"It's not a huge decrease," said Rolayne Fairclough, spokeswoman for AAA Utah. "There's still plenty of people on the road. It shows that there is a trend. There is a decreased number of travelers."

AAA attributes the decrease to the price of fuel. The rising prices of gasoline and jet fuel have cut into people's discretionary budgets. On Tuesday, a gallon of regular unleaded cost a record-high average of $4.091 in Utah. The national average was just slightly cheaper, but also a record high: $4.087 per gallon.

Oil futures in New York and London reached new records Tuesday on worries about tight supply and mounting tensions in the Middle East. Light, sweet crude for August delivery closed at $140.97 a barrel on the New York Mercantile Exchange. In London, Brent crude futures rose 84 cents to settle at $140.67 on the ICE Futures exchange.

Crude prices resumed their advance as the head of the International Energy Agency said the world is experiencing its "third oil-price shock," comparing the effects of today's prices with the oil crises that began with the 1973 Arab oil embargo and the 1979 revolution in Iran.

IEA chief Nobuo Tanaka added that OPEC is pumping oil at record levels and other producers "are working at full throttle." His comments reinforced the IEA's latest prediction that global supplies will remain pinched, despite record prices and falling demand in the U.S. and Europe.

"Day-to-day market noise can be driven by speculators," Tanaka said. "High oil prices are driven by fundamentals."

Meanwhile, during a visit to Berlin, U.S. Treasury Secretary Henry Paulson said "there don't seem to be any obvious short-term solutions" to soaring oil prices.

Oil prices began to rise in recent months as the value of the U.S. dollar fell relative to other currencies. Oil is traded in dollars, but for oil producers to get the same value by selling a barrel, they had to increase the price, Fairclough said.