Possible war, supply interruptions affecting gas prices

Wednesday, February 5th 2003, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ A possible war with Iraq and supply interruptions from Venezuela have driven up gasoline prices an average of 5 cents in Oklahoma, but officials say it may only be the beginning.

The price of a gallon of regular unleaded gas in Oklahoma averaged $1.45 on Tuesday, up a nickel from Sunday and 9 cents from a month ago, said Chuck Mai of AAA-Oklahoma.

The national average was $1.53, with an average $1.92 in San Francisco being among the nation's highest, Mai said.

Oklahoma City's average price was slightly lower than the state at $1.44, while Tulsa averaged $1.45. Gas was about $1 a gallon a year ago, he said.

``Much of this can be attributed to President Bush's State of the Union address and tough talk on Iraq,'' Mai said. ``There's a lack of any good news coming from that part of the world.''

A series of general strikes against the president of Venezuela, Hugo Chavez, has interrupted the flow of oil and affected prices, Mai added.

``The word back in the fall was that the so-called war premium was already built into the price,'' Mai said. ``That was before the factional unrest in Venezuela. The general strike is all but over and production will increase, but it may be some time before we see that oil in this country.''

Charlie Clowe, president of the Oklahoma Petroleum Marketers Association, said consumers likely will see more increases as gas distributors and retailers receive word of wholesale price increases.

``We expect to get more increases, but I don't think there's anything regional about it _ it's the international situation,'' Clowe said.

Tom Kloza, chief oil analyst for the New Jersey-based Oil Price Information Service, said wholesale prices for a gallon of gasoline topped $1 Tuesday in much of the country.

Wholesale prices averaged about 53 cents a gallon a year ago, he said. The prices don't include federal and state excise taxes _ about 35 cents in Oklahoma _ or the 4-cent to 7-cent average profit margins added by gasoline retailers.

Gasoline prices typically rise in spring in anticipation of higher demand for the travel season. There is little precedent for a price increase in February, Kloza said.

``This is very unusual for February,'' Kloza said. ``My instincts tell me its a little bit of a false alarm.''

Crude oil prices rose 82 cents Tuesday to $33.58 a barrel, up 67 percent from a year ago.

Mai said although Oklahoma's gasoline prices continue to rise, the state has the lowest average prices in the region, which Tuesday ranged from $1.50 in Kansas to $1.47 in Texas.

Uncertainty continues to drive prices, but Mai said gas prices always go up more quickly than they come down.