Gasoline prices may begin to rise as summer travel boosts demand
Many major oil companies are reluctant to be quoted on where oil prices are headed -- but not the US Department of Energy (DOE).
One DOE official says he agrees that due to current low oil prices, ''profit margins of the industry have been severely squeezed.'' But he says Exxon and other majors have the power to squeeze back.
''We would expect to see some recovery in these margins, with at least a nickel and possibly a dime added to gasoline prices through the summer driving season,'' he says.
A staff member of the Senate Energy Committee adds another factor to the picture. He notes that Exxon and other majors now receive only about $29 for the products they produce from a $34 barrel of Saudi Arabian oil.
''Buying Saudi crude at $5 above its product value,'' says this aide, ''is a long-term strategy. They would rather lose money today on crude than lose a long-term source of supply.''
Shell Oil Company president John F. Bookout predicted that excess crude oil supplies and low prices may last into 1986.
And he told the Monitor that the Reagan administration's new energy policies are resulting in more efficient production of more crude oil.