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Recent gas price drop not likely to last

LAWRENCEVILLE

Enjoy the cheaper gasoline prices. They may not last much longer.

Metro Atlanta drivers were paying $2.10 for a gallon of regular unleaded Friday, 16 cents less than last month, according to AAA, formerly the American Automobile Association.

The decline is a welcome trend for consumers who paid as much a $3.11 per gallon in the wake of hurricanes Katrina and Rita.

But how much longer will the lower prices last?

Several oil industry prognosticators say the price ebb may be nearing an end.

Tom Kloza, chief analyst with the Oil Price Information Service, said the second quarter could see an increase at the pump of nearly 25 to 50 cents per gallon as the summer driving season starts to crank up and hurricanes become a concern again.

But even though experts are confident prices will climb, "the timing of this is difficult to know," said Douglas McIntyre, senior oil market analyst with the U.S. Energy Department.

In recent weeks, Georgia gasoline prices have been giving local drivers a much-needed break.

U.S. inventories of crude oil and gasoline, boosted by increased imports and a mild January, are at the highest levels since the summer of 1999, according to the Energy Department.

That helped keep prices stable. Some questioned why they didn't decline even more.

The reason: concern that something might cause a sudden drop in oil supply. For instance, crude-oil futures jumped $2.26 Friday to $63.25 a barrel after an attempted bombing of an important Saudi Arabian crude-processing facility at Abqaiq.

Other potential supply kinks include the pending conversion of many petroleum companies to gasoline free of the chemical additive known as MTBE, which is meant to help fuel burn cleaner.

Instead, many states have banned the additive over concerns of water contamination.

The industry is trying to phase out MTBE by the summer driving season. Some analysts are a bit uneasy because past transitions to new types of gasoline have not gone smoothly.

There's also recent rebel attacks on Nigeria's oil fields. Nigeria is a key U.S. supplier of light sweet crude oil - the type most commonly processed by U.S. refineries.

The attacks and kidnappings of several oil workers, "may well put a damper on declining gasoline prices," AAA spokesman Randy Bly said in a press release Friday.