Four dollar a gallon US fuel coming soon?

[Robert Taylor]

http://www.drudgereport.com/flash3gp.htm

White House looks at reports that gasoline could hit four dollars a gallon US, Nigerian oil workers strike to cut world supply, unrest in Marxist oil producing Venezuela.

I have read a lot of links to stories posted on this forum from automotive news sources that bespeak of a hybrid cost. Just what is that? A good aquaintance is getting ready to buy a new Acura, the present one has already had two tranny rebuilds, and is under 90k miles. The new '05 Acura won't have the electronics suite of my Prius and it gets terrible fuel economy by comparison, a mid 20's per gallon average.

25 MPG average is a laughable figure now, considering where fuel prices are headed.

I actually had a discussion on the phone today with a friend who said he read that its all temporary, fuel would go way back down soon.

Just where did he read that? I told him I had been reading reports from six months ago that end of spring US per gallon average would be 2.70 a gallon. He never heard of those. I never heard of his.

Some folks are doing some powerful wishful thinking.

[D'Tan]

I can think of one other things that might put it well over 3 or 4 (gas is still only about $2.00 here... for now, and only in this town): refinery problems. I've read that the US is near or at 100% of the current capacity. If refineries go down, or there's pipeline breaks, supply and demand will rear their heads and up prices go.

[Robert Taylor]

Nigerian oil workers have gone on strike, it will affect world oil production, which is maxed out.

Refineries are maxed.

Oilfields maxed.

Demand up sharply as a result of worldwide economic growth.

Its going up more.

[Brian]

What will eventually happen then? What $7.00 a gallon and up, until we run out?

[DaveinOlyWA]

we dont need a strike anywhere for gas to hit $4 a gallon. facts are, refinery capacity has increased 4.3% over the past 3 years (stagnant or falling in the US) worldwide while demand has increased nearly 10% in that time. 50% of the increase in india and china alone.

we are simply outrunning supply. our only hope is that ALL auto manufacturers get on the hybrid bandwagon.

GM has the knowledge and talent to build a great hybrid car...(they have no doubt already reverse-engineered the Prius several times) they simply choose not to. that is why they are going buy-bye

[jayman]

Yep, the refineries are running at effective 100% capacity right now. In any process environment, at that production level there is 0 allowance for routine maintenance. So a breakdown is catastrophic.

If fuel hits $4-$6 a gallon, what's so horrible about that? Price is used to "correct" a lot of market imbalance, and that price per gallon is nothing new to most of Europe.

At the very least, we'd see a lot of Suburbans, Excursions, and H2's up on cinder blocks

Though it's too bad most of the increase isn't in the form of road taxes that can be used to rebuild our highways and invest in good mass transit options.

[rflagg]

<div class='quotetop'>QUOTE(Brian\";p=\"74530)</div>

What will eventually happen then? What $7.00 a gallon and up, until we run out?
[/b]

If we are as oil-dependant as we are right now (jet fuel, truck fuel, and so on down the line), we'll eventually be cut off in the supply chain. Us driving isn't as important as say, delivery trucks driving to deliver goods which bring in money. Same with airlines. If the world is still oil dependant when the supply runs low, it won't be a pretty picture - think WWIII.

-m.

[Danny]

The price will go back down, but only to give people a feeling of relief. That doesn't mean that it will go down to what it was before, just down enough to regain consumer confidence.

Then it will rise again and then back down, then rise again above what the peak was before, etc etc. This is how the industry works - when gas went up this past year it went high then back low. But the new low was the high from the previous "cycle," but it made people feel better about paying $1.70/gal.

Who knows how far it will rise this time before it levels off.

[DaveinOlyWA]

actually i see a "fleet vehicle" credit card coming out that allows significant reductions in gas costs. this will of course be abused by people who can most afford to pay the increase in fuel costs only because they are in the position to do so. so we little people will continue to subsidize and support big business while our "daily cost of doing business" or life continues to rise.

one thing we have to consider is that we have no real backup of oil anywhere, so what would increased refinery capacity really do for us? the federal oil reserve is not available and we are lucky it is now full, the project being completed in Dec...

funny, i remember reading articles on how filling the reserve put upward pressure on gas prices because the gas wasnt going to the general market... well... so much for that theory.

[jayman]

<div class='quotetop'>QUOTE(rflagg\";p=\"74557)</div>

If the world is still oil dependant when the supply runs low, it won't be a pretty picture - think WWIII. -m.[/b]

M:

At least.

The Chinese are over a billion people right now. If they should begin dropping like flies due to starvation, the nukes will fly.