Experts: $4 a gallon gas coming soon

[Bob Hubbard]

Experts: $4 a gallon gas coming soon
Pricing analysts say consumers can expect even higher prices at the pump.
August 31, 2005: 3:47 PM EDT
By Grace Wong, CNN/Money staff writer

NEW YORK (CNN/Money) - Consumers can expect retail gas prices to rise to $4 a gallon soon but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.

"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"

OPIS tracks wholesale and retail oil prices and provides pricing information for AAA's daily reports on fuel prices.

Brockwell said with gasoline prices now exceeding $3 a gallon before even reaching the wholesale level, it "doesn't take a genius" to expect retail prices to hit $4 a gallon soon.

"Consumers haven't seen the worst of it yet," Brockwell said.

He expects consumers in the Southeast and Northeast to be pinched first, following the impact of Hurricane Katrina on the Gulf Coast region.


CNN Article

 

[michaeledward]

I saw $3.30 in Cambridge today.

Then I was able to fill the tank at 2.61 in my hometown.

Still, it's cheaper than water.

 

[Phoenix44]

Soon? It was $3.99 this afternoon.

 

[OUMoose]

Hmmmm... and I was just looking at ad prices to put my motorcycle in the paper. Think I may have to rethink this.

 

[Cryozombie]

And when people can no longer afford gas, the gas companies are screwed, now arent they?

 

[Makalakumu]

And when people can no longer afford gas, the gas companies are screwed, now arent they?

No, we all are screwed. Americans depend on petroleum for nearly everything we do. If we can no longer afford it, all of our infrastructure suddenly becomes obsolete. Our entire fleet of vehicles suddenly become scrap. Our food delivery system grinds to a halt...

I could go on and on. Quickly spiralling gas prices are a nightmare scenario for the US economy.

$4.00 is a possability and so is $5.00 and possabily $6.00. Hurricane Katrina was a strong catagory five storm out in the gulf where all of the infrastructure was. Hurricane Ivan was a catagory three that strengthened to a four. Ivan demolished the gulf's oil and gas offshore industry. They didn't get it back online for a year. Katrina wiped the infrastructure of the map. It may take years to get production back online.

 

[shesulsa]

Visions of Americans riding their bicycles in the streets as the Japanese do come to mind ....

 

[jfarnsworth]

Well, when I went to work this morning it was still at 2.69. Today I came out and it's 3.09 :idunno: . Earlier this month I read something like we americans use roughly 19 - 20 million barrels of oil a year. Today I read that we the U.S. have over 700 million barrels ready in case of emergency. Supposedly we purchased these barrels at 30 - 35 dollars a barrel. Ok, now; how long can we last on our own supplies? Screw the towel heads! We need to start taking care of ourselves! Out of all of the countries we are always helping where the **** are these people at to help us? Nowhere! We have troops strung out everywhere. Bush is almost going to have to reinstate a draft to protect us at home, keep chasing those towel heads elsewhere, plus now clean up states. Yet we're still going to buy oil from the arabs.

And yes. I'm seriously considering riding my bicycle to work. It's 18 miles one way but I love to bike. Unforunately with winter coming soon :idunno: how am I going to do that. We also have to think about our cars outside warming up before we drive. Your mpg will go down and gas will go up.
Sorry, rant over now.

 

[Makalakumu]

Visions of Americans riding their bicycles in the streets as the Japanese do come to mind ....

Maybe after a period of really hard times.

In the short term, if there is any staying power to these prices, I can see some serious problems. Recession, rationing, bankruptcy, food shortages...etc

People don't realize just how much our lives depend on cheap fuel. Here's a couple of eye openers.

1. For every one calorie of food we eat, it takes 10 calories of oil to grow.
2. Every week, Americans use their body weight in oil.
3. If the amount of energy provided by oil were converted into the amount of energy a human could put out with manual labor, every person in the US has the equivolent of 150 people working for us.

The President is opening the strategic petroleum reserve in order to deal with this crisis. This reserve was created as a last resort measure. The problem is that we are using 20,000,000 barrels of oil per day. Demand can outstrip supply very easily.

 

[shesulsa]

I think upnorth is a lot closer to what's really going to happen that most people think.

Does this remind anyone else of anything? High oil prices? Farmers unable to pay for gas to ship their goods? Mass consumables rising in price because of the higher cost of shipping? Smaller businesses going under?

C'mon folks ... what's it called??? Starts with a "D" ...

 

[jfarnsworth]

C'mon folks ... what's it called??? Starts with a "D" ...

I was hoping that we wouldn't see that in our lifetime. However, history can/does/& will repeat itself. I'm sorry to say that I'd hate for everyone or most of us to lose anything and everything we have. It's quite scary. Look at the recent history of the NYSE. Let's hope nothing happens.

I wonder how many think Bush is doing a good job?
%think%

 

[Tgace]

The news just stated a few minutes ago that the real issue for now is refinery output. Why havent we built more and why are the ones that are open running a sub capacity?

 

[jfarnsworth]

I was reading a couple weeks ago about how we closed some refineries after gas companies have merged. The larger ones purchased some of the smaller ones and closed their refineries. Of course most of what I read is over the internet so anyway, it makes you wonder exactly how much is true. However, I'd probably believe that this.

 

[jfarnsworth]

The news just stated a few minutes ago that the real issue for now is refinery output.

Quantity is actually not the problem it's distribution of the oil. Not enough refineries to produce what we need.

 

[Rich Parsons]

The news just stated a few minutes ago that the real issue for now is refinery output. Why havent we built more and why are the ones that are open running a sub capacity?

Check the last three years, and you will see a trend every Spring and Fall.

When they switch from the Winter Fuel to Summer Fuel or the otehr way around, there always seems to be a refinery that is down, or is being repaired or is dammaged, or in this case in the south, that has been damaged by the Hurricane.

It is artificially elevated in my opinion, based upon the demand of the new fule, because the refiveries have stopped producing the old fuel, which is still in demand.

Oh well, seeing trends and patterns, like this usually makes one seem like a paranoid person. Oh Well. :idunno:

 

[Makalakumu]

The news just stated a few minutes ago that the real issue for now is refinery output. Why havent we built more and why are the ones that are open running a sub capacity?

There hasn't been any new investment in oil infrastructure in the US for 30 years. The US peaked as an oil producer in the early 70s and production has fallen ever since. Building new refineries to refine a dwindling resource is not profitable. Closing refineries and running others at sub capacity is perfectly in-line with what one would expect from falling production.

World wide, the trend is for no new investment. No tankers, no refineries, barely any new drilling. Many experts point to this as an indicator that the world has reached a peak in oil production and that the oil companies know this.

 

[Tgace]

IMO..this is just price adjustment. The US has been getting cheap gas in comparison to the rest of the world. Now in the interest of making money the powers that be are tinkering with the price until it reaches the point where we start using less gas at which point Id bet the price stabilizes.

What was last years "world average" price on a gallon of gasoline in US dollars?

 

[Makalakumu]

Before Katrina, supplies were extremely tight. There was absolutely no wiggle room and the energy markets were riding the razors edge. Katrina put a 25% crimp in the supply of oil and gas. With demand being as high as it is (AND increasing), the price spike could be quite large.

The staying power of the high prices is what economists are worrying about. Katrina was a very powerful storm. She busted up a lot of stuff worse then it has ever been busted up before.

It's a wait and see game now...

 

[terryl965]

Well this am 2.69 this evening 3.02 what a ****ing hike in 9 hrs. At this rate it will be 10.00 by x-mas. what a present that will be 250.00 to fill a tank.

 

[Rich Parsons]

IMO..this is just price adjustment. The US has been getting cheap gas in comparison to the rest of the world. Now in the interest of making money the powers that be are tinkering with the price until it reaches the point where we start using less gas at which point Id bet the price stabilizes.

What was last years "world average" price on a gallon of gasoline in US dollars?

Tom et al,

While I agree with price adjustment, most of the other countries in the world tax their fuel, as in Use Tax, meaning those who use the fuel pay a higher tax. This money is used for fixing and building new roads and bridges. Right now it may be a price adjustment, and I know the Gas Stations are not the ones making the profit, just curious as to who is.

So, if you buy a fuel efficient car, then you pay less tax. If you buy a gas guzzler then you pay more.

Just my thoughts on this.