Oil prices seep over economy

Friday, March 14, 2008

From an article by Tom Content in the Milwaukee Journal-Sentinel:

The price of crude oil surged to a trading record of $111 a barrel Thursday, continuing a run-up that has led to record gasoline prices and high home heating costs while sending expensive ripples through the economy.

The latest example: We Energies of Milwaukee asked state regulators to approve an increase of $79 million in electricity rates. That would be an increase of $2.24 a month, or 2.6%, in the average residential consumer's bill.

A key reason for the request is the record price of diesel fuel used by trains carrying coal from Wyoming's Powder River Basin to the utility's coal-fired power plants.

Some energy analysts expect the pain to continue. The federal Energy Information Administration said the price of a gallon of gasoline will hit $4 in some regions this year, and it projects the price of a barrel of oil will average $94 in 2008.

"We will look back at $3 gas as cheap," said Randy Udall, who has studied oil trends and global warming as director emeritus of the Community Office for Resource Efficiency in Aspen, Colo.