Oil prices soared as high as $38 per barrel Monday morning, and home heating oil reached $1.04 a gallon amid fear that war is imminent in the Persian Gulf.
"I can't believe it," said Ann-Louise Hittle, a senior oil analyst with Shearson Lehman Brothers Inc. "People in the market are talking about $40 a barrel as being the next target."Light sweet crude was trading late this morning on the futures market at $37.75 per barrel for November contracts, up $2.32 a barrel on the New York Mercantile Exchange. Oil sold above the $37 mark for the first time since the crude futures began trading on the exchange in 1983.
At one point, it hit $38 for a record price.
At the pump, the average price of a gallon of gasoline has hit an all-time high of more than $1.38, an industry analyst said.
The price has gone up from around $1.18 in late July, shortly before Iraq's invasion of Kuwait on Aug. 2, and jumped 2.91 cents in the two weeks since the previous survey, said the nationwide Lundberg Survey of 18,500 gas stations.
Targeting the guzzlers
The Senate took up legislation Monday aimed at driving gas guzzlers off the road, with sponsors of a tougher fuel economy bill rejecting industry claims that the measure would make them produce only small cars.
"We can reach the goals without downsizing cars," declared Sen. Slade Gordon, R-Wash., one of the bill's sponsors.
Sen. Richard Bryan, D-Nev., another sponsor of the measure, read statements by auto industry executives in the early 1970s predicting the demise of the family sedan as a result of fuel-efficiency requirements then under consideration.
"That just didn't happen. The six-passenger vehicle is here just as it was before," said Bryan. The fuel economy measures were put into effect, and average mileage for cars increased from 14 mpg to about 28 mpg in the past 15 years.
The bill before the Senate would require the average fuel economy of cars to go to about 35 mpg over the next five years and to 40 mpg by the year 2001.
A vote to cut off debate and bring the matter to a vote could come as early as Tuesday.