Analysts Predicting $10 gas prices are coming

[WA98296]

"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.

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."

Read about it here:
http://www2.nysun.com/article/75363

[L. Coyote]

1. And the source is.... LOL

[Subdivisions]

4. You're good at one-liners with no substance. Prove your

inferred position that there's no problem with oil production and gas prices won't reach those levels.

BTW, gas is already $10 a gallon in Europe.

[Andy823]

15. Yes gas is much higher in Europe

But most of that cost is taxes they put on gas to pay for health insurance for everyone, and for mass transit programs.

[Subdivisions]

21. Prove your assertions that there is and never will be

a problem with oil PRODUCTION.

Otherwise, anything you have to say on the subject is irrelevant and a waste of everyone's time.

[L. Coyote]

25. It is a prediction. The source is the future!! Damn, explaining one liners required now!!

Glass balls is what I see here, if not spreading panic for profit!!!

[CatWoman]

34. LOL - Eenie meanie, chili beany

the spirits are about to speak :rofl:

[L. Coyote]

37. I see money lots, lots of money. And I see marks, lots and lots of marks with money....

Now all we need is to separate the marks from their money!

Ain't BIG OIL a fun board game, as in Chairman of the Board... et.al.

[Mojambo]

2. Note to self. Start transitioning to the stationary bike at the gym.

Cause right now I can only do like 15 minutes, and that's not gonna get me to work.

[onehandle]

3. It's possible. This is also why the next President will only serve one term.

Things are going to get much worse and they won't be able to fix it.

[Breeze54]

5. Thanks for this 'uplifting' post...

:grr:

Anymore RW fear you want to spread around today?

NY SUN? :puke:

[Subdivisions]

6. RW fear? I guess gas is still a buck a gallon in your neighborhood. n/t

[Winterblues]

8. Oh everything is going to be wonderful

Price of gas is going to drop to about fifty cents a gallon and the air will just clean itself....If you doubt gas prices will continue to rise then you are what some would call rather naive...IMO..

[L. Coyote]

26. Understand, I'm invested in wheat futures. I love this post. FEAR $$ FEAR $$$ FEAR $$

Getting rich on speculation and fear go hand in hand.

[Warpy]

7. I haven't owned anything with more than 4 cylinders

since 1969. I drove my dad's car in Florida a couple of years ago, and was appalled by how much more gas a 6 cylinder car sucked up.

Being a cheapskate has always worked well for me.

Unfortunately, as we old crocks saw back in the 70s, the doubling of gas prices is always felt by at least a doubling in the cost of all other goods and services with paychecks lagging far, far behind.

I taught myself how to cook and sew back then and managed to cope without going into debt. Undoubtedly those skills will be handy once again.

[NJCher]

16. Me too, Warpy

I'm a skinflint at heart and never did feel comfortable with all the excess in our society: Hummers, Expeditions, people throwing away food just because they preferred something else for dinner.

Being a boomer, I have my skill set down, too: gardening, an efficient car, able to buy just about anything secondhand. I can sew, too, but prefer to figure ways to get around that.

I'd say of all my skills, the mindset on how to make do is the most valuable. The kids in my college classes don't have a clue in this regard.



Cher

edited to add this link: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3218276

Incredible!!

[Uncle Joe]

9. Rickshaws anyone? Get them while they're hot! n/t

[shain from kane]

12. And they're Made in China.

[Uncle Joe]

14. I think Japan makes them as well, but I imagine we could at least build that here. n/t

[kestrel91316]

10. I did a trial "run" of taking transit to the office this weekend.

15 minutes walk to bus stop. 20 minute wait at bus stop (it was Sunday evening - weekday AM will be 5 minutes or so). 5 minute bus ride. 5 minute walk from bus stop to office.

Or, I could walk the whole distance in 45 minutes, but I really don't want to be doing that. Maybe sometimes on the walk home like I used to do at the other place........but not both ways.

Biking would be nice but the cars make it too dangerous. And I don't want to arrive at work with "hat head" that I can't fix.

[aint_no_life_nowhere]

31. Twenty-five minutes away from your work - Excellent

If all of America could average a 25 minute commute using public transportation, we'd be much better off. Did you move to be close to your work or did you just look for a job close to home? Or did things just coincidentally work out in a convenient way?

[kestrel91316]

40. I have made the deliberate choice to live near to my office.

I bought the practice in part because it was near where I lived at the time, and have stayed in the area for 17 years.

[maxsolomon]

32. you can do all 3

in fact, a FIVE MINUTE BUS RIDE (mine is 40-50 minutes) or a 40 minute walk means that your bike commute would be under a 20 minutes, i'd wager.

i ride in heavy traffic. its possible. hat head won't seem so important above $5/gallon.

also: http://www.electric-bikes.com/

[Fovea]

35. At the predicted 10/gal

you will still be bicycling in all that traffic, but they will be about half other bicyclists.

[kestrel91316]

41. I have tried the bike ride. It comes down to this:

1) Ride on Ventura Blvd and die within a month. The drivers here TRY to hit cyclists, and yea I already know from personal experience.

2)Ride on the sidewalk (technically illegal) and risk being hit by traffic on side streets or in driveways acting like they are at LeMans.

Traffic is gonna have to get considerably lighter before I bike to work on a weekday. I do it occasionally on Saturdays, or when I come in to take care of the kitties on Sunday.

[maxsolomon]

42. fair enough

i've been hit twice in seattle. bike lanes are nice.

[kestrel91316]

43. Here in LA they make bike lanes useful for recreational rides, but

don't put any where they would be of actual value to people commuting to work.

[aint_no_life_nowhere]

45. There's a major movement underway in California to expand so-called bicycle freeways

throughout the State. It's pretty interesting stuff, if it ever gets funded and fully developed:

http://www.americantrails.org/resources/railtrails/CArail.html

[LakeSamish706]

11. I have little doubt that this will be true, and especially if the US attacks Iran. n/t

[Coyote_Bandit]

13. Crude oil is traded worldwide

in units demoninated in dollars.

This prediction has at least as much to do with the anticipated decline in the value of the dollar as it has to do with supply and demand issues.

[dipsydoodle]

17. Until the petrodollar gets dumped

and then you'll be able to look back at the good 'ol days of only $10 a gallon.

[notesdev]

18. You are correct

This is far more about the collapsing value of the dollar than any other issue.

If you chart the price of oil against the price of gold, you'll see that oil prices, weighed against a relatively stable commodity, haven't budged a bit.

Oil prices are NOT rising! The value of US currency is dropping.

[Coyote_Bandit]

20. I suspect that oil prices are actually declining

in some parts of the world where the currency is strngthening against the dollar.

[notesdev]

23. There is also the question of oil vs. gasoline

Without a refinery, oil is just useless sludge. So there is a floor to end-user supply; refineries can only process so much oil, any supply above that is nothing but reserve. Very very few new refineries have been built since the 1970s.

Richard Branson (of Virgin fame) is a real sharp guy - he's reportedly planning to build his own refinery, which will be a very powerful source of economic power.

[hunter]

33. Um, no...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=144979&mesg_id=145069

[hunter]

49. The author of the graph has updated it.

http://worthwhile.typepad.com/

[Coyote_Bandit]

52. From the link posted

"In the Euro zone, an appreciating currency attenuated much of the rise in oil prices, and oil was slightly cheaper on March 20 than it was on Jan 2. The even stronger appreciation of the yen means that oil prices in Japan are 7% lower than when the year began."

Appears that oil has become cheaper in some places where the currency is appreciating relative to the dollar....my suspicions are confirmed....

[hunter]

59. Depends how far you want to go back...

Nobody's got $30/bbl oil.

[Coyote_Bandit]

61. My point is rather simply

that if you are paying in a currency that has appreciated relative to the dollar then you have not had the same experience of price increases. The slope of the lines on the graph also bear that out.

Assume a dollar and a euro both both one barrel of oil. If the dollar become worth less relative to the euro then a euro will still buy a barrel of oil (assuming the same market prices) but it will take more than a dollar to buy that barrel of oil. And that is exactly what has happened. The price of oil which is valued worldwide in dollars has risen. But many currencies have appreciated relative to the dollar. So those Euros now buy more oil than those dollars.

[mike_c]

24. can you post a graphic of that for those of us who don't follow those markets...?

I would be very interested to see such a comparison. TIA if you have the info and can put it into one graphic (or know where to find one otherwise)!

[notesdev]

27. Yep - a real eye opener

Not the best chart on the subject - didn't spend too much time looking, I've seen this chart tracing prices back to the 1950s - but it's a good illustration. That 1.0 line means a relative unchanged price between gold and oil. Notice how the price of gold vs. oil fluctuates in a very small range. Traced back to the 1950s, the curve looks exactly the same; small ups and downs but never too far from the baseline.

In terms of gold, the price of oil is almost exactly where it was in January 2000... and at many different points extending back decades.

The value of the metals in a quarter, back when a gallon of gas cost a quarter, could still today buy a gallon of gas.

Anyway, notice that steep climb in the dollar/oil ratio. If you turn the chart upside down, it's a good illustration of the value of the dollar.

If you're interested in more on the subject, look at various calculations for a dollar index. There are many ways to calculate that index but they all show the same steep drop in the dollar.

[mike_c]

46. thanks!-- that's a rather telling record of the Bush presidential legacy....

eom

[hunter]

48. What's gold got to do with it?

Really. Gold is what people believe it is, even more so than paper money. Gold is almost as fake as diamonds. It's a good conductor of heat and electricity, it resists corrosion, it makes nice jewelery, but mostly it just sits there being an object of human folly.

Like a gun, gold won't do you any good in a bad neighborhood. Someone will just smack you over the head and take it when you least expect it.

Maybe we should compare the price of oil to the price of saffron. That might make a little more sense, saffron is a nice thing to flavor your supper with, even though just like gold it's got less than a rational history about it.

http://en.wikipedia.org/wiki/Saffron

Our only real wealth in times of trouble is our ability to form and maintain communities.

A hungry man might give you gold for food, but when neither of you has food, there's no deal to be made.

[notesdev]

50. Gold is an unchanging store of value

It's been consistently held to be of value among almost every human civilization, for thousands of years.

Thus it's a good baseline against which to compare the value of other things... such as a piece of paper that has value only to the extent that people perceive it as valuable. Changes in the perceived value of pieces of paper can therefore be measured by how much gold one can buy with them.

[hunter]

51. Nope. I don't believe that.

Gold is a metal. So is Lead. Is Lead an unchanging store of value? How about Copper? How about Aluminum?

I sorta like Buckminster Fuller's idea that the basic unit is the kilowatt hour, but that's not true either.

The basic unit is what people do when they are hungry, cold, sick, and scared. Do they figure out some peaceful communal solution to their woes, or do they simply lash out and attack their neighbors?

If they steal from their neighbors, they are missing out on what it means to be human.

How much you can buy with gold as a symbol of your fealty to the political powers who control the resources necessary to your own survival is not a measure of value.

[notesdev]

58. if you're going to go that far

you could say the same, even more so, for any sort of currency, and you can say that for oil as well.

So a dollar/oil comparison or gold/oil comparison is just nonsense-to-nonsense from that perspective - neither one is essential to human survival.

However, in the world that we live in today, people want a lot of things above and beyond what is necessary for survival; and moreover, very few people are in a position where they don't need to trade for the basics which they need to survive; so for this practical scenario which most people face, discussions of economics can inform them how to do the best with what they have.

[Oleladylib]

19. 1929 all over again...anybody for purple grape juice

[Fovea]

22. Going out tomorrow

and buying a couple of more locks for my bicycles.

[Catherine Vincent]

28. Yeah, right. nt

[spanone]

29. why not? the chinese are just getting in the game and guess what? they love the big cars

[aint_no_life_nowhere]

30. I take it that salaries are going to double, right?

since everything else is going to go up, along with the price of gas. Or will the little guy get squeezed out again? If salaries lag behind as they usually do, how will the American middle class survive?

[Fovea]

38. salaries may double.

but there will only be about 1/4th the jobs.

The protests in DC today say it all. Right now most of what we get gets there by truck. What if no trucks came to your business?

Middle class?
Say goodnight, middle class.
Eventually, we will have a new middle class.
But the dividing line won't be if you have a mcmansion in the burbs.
It will be if you have more than 5 acres in crops or a steam engine.

[ShaneGR]

47. I would imagine major shipping companies would make a ton of money.....

If you look at the distribution network of UPS & FedEx, even with rising prices they can just charge more money on fuel surcharges ($1 a package over Christmas pays for their fuel year round).

Small shipping companies won't be able to survive, but the giants will.

With that said, I don't think the Goverment will let gasoline get above $6.00 a gallon.

[Fovea]

56. What mechanism(s) do you think

the government would employ to cap gas at six?

I can only think of one that might work, and that is nationalization.

[Duke Newcombe]

65. GMTA...

and I'm not one normally for nationalization--but for what I believe are "infrastructure" components (oil, energy, telephone), I could live with it.

An infrastructure component cries out for regulation/nationalization in direct proportion to its importance in the infrastructure. At least when I'm coronated.

Duke

[Duke Newcombe]

64. And the commensurate increase in goods from those offering...

..."free" shipping would follow shortly thereafter. <sigh>

Duke

[Initech]

36. Congress needs to put a cap on gas prices like ASAP.

I bet the fucking corporate whores at Exxon are loving this. :mad:

[Clear Blue Sky]

39. $10/gal gas could easily make whomever wins in November a one term President...n/t

[Lorien]

44. This was on my loal news this evening as well

once again they seem to be trying to prepare people...

[Strelnikov_]

53. Opec warns oil could reach $200

http://newsvote.bbc.co.uk/2/hi/business/7370441.stm

Opec, the oil producing cartel, has warned that the price of crude could keep rising to reach $200 a barrel. Opec president Chakib Khelil blamed the falling value of the US dollar, which makes other assets, including oil, more attractive for foreign investors.

His comments came as oil prices hit a fresh high, just below $120 a barrel.

[RadiationTherapy]

54. $10!! Now I won't mind when it hits $5...

funny how that works.

[aint_no_life_nowhere]

55. At those prices - $260 to fill the tank of an Escalade

and get 14 miles a gallon if you're lucky. If you commute about 25 miles to work, it would cost more than $700 a month just for gas to and from work.

[samsingh]

57. no matter what happens 'experts' pop out claiming a outlandish

outcome. others claim the opposite. some will always to right and some wrong.

[Zynx]

60. The appropriate headline is "Two analysts think..."

Do not take this as gospel.

[natrat]

62. of course not but to dismiss the possibility outright is also pretty stupid

[Marrah_G]

63. at 10$ per gallon my family would be sunk.

If it goes to 5.00 per hour my children will need to raise themselves since I will have to work 16 hours a day to support them.