Gas Could Go To $10/gal...

[KnightofChrist]

May what to stock up now!

[url="http://www2.nysun.com/article/75363"]Gasoline May Soon Cost a Sawbuck[/url]
Big New Shock at the Pump Forecast by Two Analysts
By DAN DORFMAN


Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon.

That's the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize.

Gasoline nationally is in an accelerated upswing, having jumped to $3.58 a gallon from $3.50 in just the past week. In some parts of the country, including New York City and the West Coast, gas is already sporting a price tag above $4 a gallon. There was a pray-in at a Chevron station in San Francisco on Friday led by a minister asking God for cheaper gas, and an Arco gas station in San Mateo, Calif., has already raised its price to a sky-high $4.62.

In Manhattan, at a Mobil gas station at York Avenue and East 61st Street, premium gas is now $4.03 a gallon. Two days ago, it was $3.96. Why such a high price? "Blame the people at STOPEC (he meant OPEC) and the oil companies," an attendant there told me.

These increases are taking place before the all-important summer driving season, signaling even higher prices ahead.

That's also the outlook of the Automobile Association of America. "As long as the price of crude oil stays above $100 a barrel, drivers will be forced to pay more and more at the gas pump," a AAA spokesman, Troy Green, said.

Oil recently hit an all-time high of nearly $120 a barrel, more than double its early 2007 price of about $50 a barrel. It closed Friday at $118.52.

The forecasts calling for a jump to between $7 and $10 a gallon are based on the view that the price of crude is on its way to $200 in two to three years.

Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston-based Dune Energy, Alan Gaines, sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla., Sean Brodrick, projects a range of $8 to $10 a gallon.

While $7-$10 a gallon would be ground-breaking in America, these prices would not be trendsetting internationally. For example, European drivers are already shelling out $9 a gallon (which includes a $2-a-gallon tax).

Canadians are also being hit with rising gas prices. They are paying the American-dollar equivalent of $4.92 a gallon, and they're being told to brace themselves for prices above $5.65 a gallon this summer.

Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines — in an impressive display of crystal ball gazing — accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.

His latest prediction of $200 oil is open to question, since it would undoubtedly create considerable global economic distress. Further, just about every energy expert I talk to cautions me to expect a sizable pullback in oil prices, maybe to between $50 and $70 a barrel, especially if there's a global economic slowdown.

While Mr. Gaines thinks there could be a temporary decline in the oil price, he's convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China, India, and America.

Mr. Brodrick's $200 oil forecast is largely predicated on a combination of pretty flat supply and rip-roaring demand. Other key catalysts include surging demand in China and India, where auto sales are booming, and major supply disruptions in Nigeria and also in Mexico, our second-largest source of oil imports, where oil production has fallen off a cliff.

More factors include the ever-present danger of additional supply disruptions from volatile countries in the Middle East that are not our allies, and the unwillingness of SUV-loving Americans to trim their unquenchable thirst for foreign oil. Likewise, for the first time, emerging markets this year will use more oil than America.

To Mr. Brodrick, it all adds up to an ongoing energy bull market. His favorite plays are the Energy Select Sector SPDR Fund ; United States Natural Gas Fund LP; Apache Corp.; Occidental Petroleum; Anadarko Petroleum, and Schlumberger.

[doe-jo]

[Lil Red]

+J.M.J.+
wonderful

[Ash Wednesday]

[XIX]

Ouch.

Is it possible/moral to invest in oil right....like now?

[prose]

Gas is like 4.60 a gallon here. And we produce oil only a few hours away. sigh.

[Noel's angel]

It's about £1.20 per litre here. That's about $2.40 per litre.

[Archaeology cat]

[quote name='Noel's angel' post='1512749' date='Apr 28 2008, 09:17 PM']It's about £1.20 per litre here. That's about $2.40 per litre.[/quote]
Which translates into approximately $10.896/gallon, if I'm doing my math correctly.

Since I don't drive, I'm not sure what it is here at the moment.

[dUSt]

Looks like I'm getting one of these:
[url="http://www.popularmechanics.com/automotive/new_cars/4251491.html"]http://www.popularmechanics.com/automotive...rs/4251491.html[/url]

The air that comes out of it's exhaust pipe is breathable.

[LouisvilleFan]

Whatever. We'll see what actually happens. Expert analysts have a knack for sounding smart and being wrong. Much of the recent rise in gas prices is also due to the cheapening dollar. If the credit crisis finally abates and the dollar is able to strengthen a bit, we'll see gas prices come down a little.

Still, the long-term trend is still headed higher as demand from China, India, and other developing countries is outpacing supply. I fully expect gas prices to outpace inflation, which is just another good reason to live in the city where mass transit and bicycling are reasonable alternatives for shorter trips.

Edited April 28, 2008 by LouisvilleFan

[Noel's angel]

Well, if we're paying $10.896/gallon already in Ireland...who's to say it won't it the US in the same way?

Edited April 28, 2008 by Noel's angel

[aalpha1989]

That's the day I move to Munich and stop driving. Public transportation in europe is much better than here.

[aalpha1989]

[quote name='Noel's angel' post='1512773' date='Apr 28 2008, 04:32 PM']Well, if we're paying $10.896/gallon already in Ireland...who's to say it won't it the US in the same way?[/quote]

It's not that expensive in Ireland because that's how much the oil costs, it's that expensive because the government places huge excise taxes on gasoline. Germany does the same thing. Your price has greater flexibility because the government could potentially lower hte excise taxes, and so your prices could stay about the same. Who knows if hte gov. would, though? If the government keeps high excise taxes then your gas will go up just as much as ours will.

[kenrockthefirst]

Cheap gas / petrol is an anomaly as far as the world outside of the US is concerned. Just because it's always been that way doesn't mean it's always going to be that way. I would direct your attention to the concept of [url="http://en.wikipedia.org/wiki/Peak_oil"]peak oil[/url], which means gas / petrol is only going to become more, not less, expensive.

[Dreamweaver]

As much as people try to deny it, our culture is incredibly linked to oil. Even if you walk/public transportation/bike, you'll be paying more for food and other commodities.

One thing that really gets me is when economic analysts say that the price of gas will increase 25 cents by the end of the month, and you'll see the price jump exactly that amount within a matter of days. Its a self-fulfilling prophecy!