Road Warning: $7 Gas May Be Ahead

[Cacti]

Road Warning: $7 Gas May Be Ahead

NEW YORK (CBS News) ― A new energy report predicts $200-a-barrel oil in as short a time as two years. If that happens, gas would likely go up to $7 a gallon - and that would have an enormous impact on the way Americans live


wbztv.com - Road Warning: $7 Gas May Be Coming By 2010

[NYPrius1]

I think it will be at $5.00 by the end of this year! Our Home heating oil will be at $5.00, since that was the best price I could lock in last month.
Perhaps this will get people to at least slow down a bit on the roads. I do the speed limit and everyone flys by me all the time.

[chogan2]

There's a nice op-ed piece in today's NY Times, explaining why its probably not correct to blame high oil prices on "speculation". It's by Paul Krugman, imho the smartest economist in the US. With links to a more detailed discussion.

http://www.nytimes.com/2008/06/27/op...hp&oref=slogin

Not to try to hijack the thread, but most people who blame speculators have no idea how the commodities futures markets work. To a pretty close approximation, the futures markets are a zero-sum game: for every speculator who bought a futures contract and saw the value rise, there's another speculator who sold that contract and has to buy it back in at a higher price (or physically delivery the oil). For every such paper trade, the sum of gains and losses is zero.

Reading the link from the NY Times piece is a decent introduction. The point is made several times: the only way speculators can increase prices is if they cause increased actual physical hoarding of the product. In this case, that means either increased oil inventories (not occurring, according to the data) or by keeping the oil in the ground rather than pumping it (impossible to assess).


Krugman characterizes the interest in blaming "speculators" for the current price of oil as just another form of wishful thinking. It substitutes for actually doing some to deal with the new reality of increasing demand and dwindling supplies of cheap liquid fuels.

[hill]

Not 'may be' ahead ... it's just a matter of whether it's next year, or as far away as 3 years. Remember malorn? before he dissapeared? Claiming by this summer that gas would be back down to $2.50 ?? Even he woke up and smeled the coffee.

[Scummer]

Less cars on road = more space for me and fellow cyclists!

[Fibb222]

Originally Posted by chogan2

There's a nice op-ed piece in today's NY Times, explaining why its probably not correct to blame high oil prices on "speculation". It's by Paul Krugman, imho the smartest economist in the US. With links to a more detailed discussion.

http://www.nytimes.com/2008/06/27/op...hp&oref=slogin

Not to try to hijack the thread, but most people who blame speculators have no idea how the commodities futures markets work. To a pretty close approximation, the futures markets are a zero-sum game: for every speculator who bought a futures contract and saw the value rise, there's another speculator who sold that contract and has to buy it back in at a higher price (or physically delivery the oil). For every such paper trade, the sum of gains and losses is zero.

Reading the link from the NY Times piece is a decent introduction. The point is made several times: the only way speculators can increase prices is if they cause increased actual physical hoarding of the product. In this case, that means either increased oil inventories (not occurring, according to the data) or by keeping the oil in the ground rather than pumping it (impossible to assess).


Krugman characterizes the interest in blaming "speculators" for the current price of oil as just another form of wishful thinking. It substitutes for actually doing some to deal with the new reality of increasing demand and dwindling supplies of cheap liquid fuels.

Finally somebody else on this board that says what I've been saying. Thanks Chogan.

[Fibb222]

Furthermore,, from reportonbusiness.com: globeinvestor.com - U.S. is in recession, and getting worse: Buffett

And he said supply and demand, not market speculation, is what's driving oil prices to new heights above $130 (U.S.) a barrel.
At least nine bills proposing limits on oil speculation have been introduced in Congress in recent weeks, but Mr. Buffett indicated that lawmakers are missing the point.
“In my adult lifetime, up until the last year or two, there's been a huge amount of excess supply available,” Mr. Buffett said.
“We don't have excess capacity in the world any more, and that's why you're seeing these oil prices.”

[Froley1]

I agree with the $5.00 prediction
my thoughts have been that around labor day the oil companies will make the jump from 4 to 5 dollars a gallon or very near 5....
strange tho that several people in my neighborhood have apparently purchased new suv's and pickup trucks because of the 0% deals and the lower sticker prices----with the dealers unloading them----apparently my neighbors are unable to look ahead at all...
Froley

[hill]

Originally Posted by Froley1

I agree with the $5.00 prediction
my thoughts have been that around labor day the oil companies will make the jump from 4 to 5 dollars a gallon or very near 5....
strange tho that several people in my neighborhood have apparently purchased new suv's and pickup trucks because of the 0% deals and the lower sticker prices----with the dealers unloading them----apparently my neighbors are unable to look ahead at all...
Froley

Similarly, here @ work, we have co-workers that will not budge from their SUV driving pride, and love the thousands they 'saved' on their Denalis.

[EJFB1029]

Originally Posted by Froley1

I agree with the $5.00 prediction
my thoughts have been that around labor day the oil companies will make the jump from 4 to 5 dollars a gallon or very near 5....
strange tho that several people in my neighborhood have apparently purchased new suv's and pickup trucks because of the 0% deals and the lower sticker prices----with the dealers unloading them----apparently my neighbors are unable to look ahead at all...
Froley

Well you are from Roswell, they might be aliens and don't have to worry about oil prices.