How’s it feel to be part of history?

Since Saturday, people in Lincoln, Omaha and the rest of Nebraska have been paying record high prices for regular-grade, unleaded gasoline. 

And the biggest reason, by most accounts, is the price of crude oil, which set another record high Monday at $117.    That price has tripled since 2004.

“So it’s no surprise, I guess,” said Chuck Salem, president of Salem Oil Co. in Lincoln. 

And yet, local demand seems steady, if anything, at a time when fine weather starts making it rise, according to Salem, whose company operates seven Fast Break BP convenience stores. 

“It’s hard to answer exactly,” Salem said of local demand.  “It’s been pretty steady.   Maybe a little slackening that’s kept us steady.   If there is some, it’s slight.”

So don’t expect to pay much less, unless it’s the dime or so you pay less for ethanol.  In Nebraska, motorists can expect a peak range of from $3.40 to $3.60 this summer for self-service unleaded, according to AAA.

Salem also mentioned the other influences on gasoline prices that people have been talking about.  Or cussing about.

Such as the value of the dollar, which, because it’s falling, has made petroleum products priced in dollars more expensive.   Meanwhile, bullish market speculators see no end in sight to rising petroleum prices, so they invest more and send futures prices even higher. 

Salem said he was talking to a group of business friends, people who know markets, over a weekend golf game.

As the Nebraska and Lincoln gasoline price records fell, the friends started figuring how much of the price of a barrel of crude was what it costs to get oil out of the ground, refined and to market. 

“And how much of it is our president turning our dollar to a half dollar?” Salem exaggerated.  “And how much to speculators?

 “My thoughts are that speculators, treating gas or diesel as a commodity, have paid a huge part in running those prices up,” he said. Then, of course, there is the new demand from countries like China using more of a finite resource in a worldwide market.

“They (the speculators) see that and keep buying like crazy,” Salem said.  

The devaluation of the dollar, assisted by lower interest rates, drives up gasoline prices by making commodities like oil, priced in dollars, more attractive to foreign investors with relatively stronger currencies to invest.

The dollar is weaker for a lot of reasons, not least of which are the huge U.S. trade deficit, declining U.S. economic growth and low interest rates.

OPEC blames U.S. economic policies.  President Bush tries in vain to get OPEC to increase production.

So goes the price of a barrel of oil.  

“I think we came to a meeting of the minds that the speculators were good for $20, and the devalued dollar is responsible for about $30,” said Salem, on behalf of the golfing market minders.

So that’s $50 of premium on top of what they figure could be a more realistic price of a barrel, around $60-$65 or so, supported only by supply and demand.

That means about 41 percent politics and panic in the value of a barrel of oil.

And that’s the hottest explanation going for why the price of regular gasoline was at a record price of $3.548 in Lincoln on Monday.

Lincoln’s previous record high average price for regular-grade unleaded gasoline was $3.48 a gallon, set last year on May 22, when a Kansas refinery was out of service because of flooding.

Nebraska’s  previous record average was $3.43, set May 23, 2007. 

 Reach Richard Piersol at 473-7241 or at dpiersol@journalstar.com.