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Thread: $10/Gallon gas?

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    Default $10/Gallon gas?

    Even if their predictions are slightly off, let's look at a possible worst case scenario. What if gas hit $7 per gallon? What consequences would there be? Among my guesses would be higher food prices, a significant drop in summer travel, and maybe a bit of a backlash towards the middle east. I also wonder if some cities would use it as an excuse to limit companies from doing inspections or limiting the number of units that respond on AFAs and other calls.

    Gas May Soon Cost a Sawbuck
    Big New Shock at the Pump Forecast by Two Analysts
    By DAN DORFMAN, Special to the Sun | April 28, 2008

    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.

    RELATED: Truckers Protest Fuel Costs at Washington.

    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.

    Dandordan@aol.com


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    Default You want the painful truth?

    Well, we've kinda been through this before.

    I predict that we'll see an increase in hybrid vehicle sales, as people try to move towards smaller cars with better fuel-mileage (1970's, anyone?), the folks who have been desperately holding onto their dually Ford F-950 turbo diesels will end up selling them for whatever they can get, and the government will rush in with boxes of bandaids for gunshot wounds and regulate us into oblivion (a la Mortal Combat "Finish Him!").
    "Yeah, but as I've always said, this country has A.D.D." - Denis Leary

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    Forum Member scfire86's Avatar
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    Default

    Bought a hybrid over a year ago.

    Only fill up every two weeks.

    It would be a typical move on the part of the Bush Admin to expect our "friends" in Saudi Arabia to bail us out, instead of investing in this country to make us more free of foreign oil.

    The ethanol scam doesn't count.

    The news tonight is that the Fed might make one more rate cut. If it does, the resultant effect is that the dollar will be devalued. When the dollar is devalued, the price of oil rises. When the price of oil rises, the US economy slows down.

    Talk about a vicious circle...
    Last edited by scfire86; 04-28-2008 at 11:47 PM.
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    Quote Originally Posted by scfire86 View Post
    Bought a hybrid over a year ago.

    Only fill up every two weeks.

    It would be a typical move on the part of the Bush Admin to expect our "friends" in Saudi Arabia to bail us out, instead of investing in this country to make us more free of foreign oil.

    The ethanol scam doesn't count.

    The news tonight is that the Fed might make one more rate cut. If it does, the resultant effect is that the dollar will be devalued. When the dollar is devalued, the price of oil rises. When the price of oil rises, the US economy slows down.

    Talk about a vicious circle...
    I wonder how much inflation was caused by printing off these tax rebates we just received out of thin air. They can only cut the rates so much.
    "Yeah, but as I've always said, this country has A.D.D." - Denis Leary

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    Quote Originally Posted by scfire86 View Post
    Bought a hybrid over a year ago.
    It would be a typical move on the part of the Bush Admin to expect our "friends" in Saudi Arabia to bail us out, instead of investing in this country to make us more free of foreign oil.
    Personally, I'd rather use up all of the oil in the Middle East before we use up all of the domestic oil.


    But that's just me...

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    55 Years & Still Rolling hwoods's Avatar
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    Angry And..............

    I have been busy lately, making a few Phone Calls and sending some emails to the people that hold elected office that will appear on the ballot in November. I also encountered my congressman at an event that we were attending, and he got my message in person. IF GAS IS NOT BACK TO $2.50/Gal. OR LESS BY JULY 4th, YOU'RE NOT GETTING MY VOTE.

    My thought is this - We have a chance to turn EVERY incumbent out of office in November, and I think we should do just that. Times change, and the current economic situation would be uncomphrehensible to the founders of this Nation. The Free Enterprise system envisioned by our founding fathers is broke, and it needs an overhaul. First. Eliminate the Futures market system. Second. Impose serious controls over the entire energy industry. Third. Require reinvestment in infrastructure from corporate profits. Part of our problem with petroleum products is a lack of refinery capacity. Fourth. Suspend or remove current Laws that interefere with increasing our ability to create additional energy sources. And That's just a start.
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    Quote Originally Posted by hwoods View Post
    Part of our problem with petroleum products is a lack of refinery capacity. Fourth. Suspend or remove current Laws that interefere with increasing our ability to create additional energy sources. And That's just a start.
    Are you out of your mind!! New Refinerys? Suspend laws? What would the people in Berkeley think?

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    Quote Originally Posted by localtrainer75 View Post
    Are you out of your mind!! New Refinerys? Suspend laws? What would the people in Berkeley think?
    The Berkeley people are planning their celebration parties. 'Cause as soon as Billary/Obama get in office the world is going to be all puppy dogs and roses!

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    This is how a market based economy works. As demand rises and supply is unable to meet the demand, prices rise. Because oil is in demand worldwide prices rise world wide. Prices will rise further as 1 billion people in China and 1billion people in India all buy gas guzzling SUVs, just like Americans.
    Writing Congress to drop prices is interesting. Do you believe price controls are the answer? Or should we have a state run economy controlled by the federal government that regulates all commodities? That didn't work to well for the Soviet Union.
    At a time of record oil company profits there is no incentive for the oil companies to build more refineries. Why would Shell or Exxon or any other company build a refinery to increase supply and thereby lower demand which would lead to lower profits? The oil companies are in the business to make money, not provide a social service. Furthermore if you have a pension plan that includes oil company stocks you should be happy on your rate of return. If not, sell your oil stocks and buy stock in wind power if you want to make a statement against the oil companies.

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    Quote Originally Posted by SFDE37 View Post
    This is how a market based economy works. As demand rises and supply is unable to meet the demand, prices rise. Because oil is in demand worldwide prices rise world wide. Prices will rise further as 1 billion people in China and 1billion people in India all buy gas guzzling SUVs, just like Americans.
    Writing Congress to drop prices is interesting. Do you believe price controls are the answer? Or should we have a state run economy controlled by the federal government that regulates all commodities? That didn't work to well for the Soviet Union.
    At a time of record oil company profits there is no incentive for the oil companies to build more refineries. Why would Shell or Exxon or any other company build a refinery to increase supply and thereby lower demand which would lead to lower profits? The oil companies are in the business to make money, not provide a social service. Furthermore if you have a pension plan that includes oil company stocks you should be happy on your rate of return. If not, sell your oil stocks and buy stock in wind power if you want to make a statement against the oil companies.
    Well said.
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    Yep....What ^^^^^ he said!

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    I have always been amazed that no one over the past 30 years has called for a Manhattan project on energy. Our energy policy is truly the worst example of doing the same thing and expecting a different result.

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    It is not all supply and demand. If that were the case, the oil companies would not be consistently breaking new profit margins every quarter.

    It is about raising prices out of GREED because they can.
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    Whatever happened to those Volkswagon Diesel powered Rabbits/Golfs? Those little cars would get almost 50mpg! Add in the fact that Biodiesel makes better sense than this ethanol nonsense and I might have to get one..

    The idea of Ethanol as a viable replacement is really a joke. Compared to biodiesel, anyway. Most people don't realize that the price of Ethanol will be directly proportionate to the costs of transportation. Ethanol is too corrosive to be shipped by existing pipelines, so it must be trucked. It doen't have the same btu's as petroleum based gasoline, and will get poor fuel mileage compared to petroleum. I think in the U.S. it would be better to invest in biodiesel, and diesel vehicles. We should grow selected crops based on their oil content for the biodiesel. It can be shipped great distances by existing petroleum pipelines, thus less transportation costs once refined. Some minor adaptations might be required to older diesel vehicles, but for the most part, performance will be unaffected. Compared to Ethanol, I would vote for the diesel everytime. Now, if we could bio-engineer a biodiesel source plant that would grow with the vigor of kudzu, the surplus could be sold world-wide. The only problem with biodiesel that I am aware of is that it will gel in cold climates. This might be resolved with chemical engineering, or more quickly with regulated fuel heaters on vehicles in cold climates.

    Anybody else have thoughts about biofuels?
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    Quote Originally Posted by MemphisE34a View Post
    It is not all supply and demand. If that were the case, the oil companies would not be consistently breaking new profit margins every quarter.

    It is about raising prices out of GREED because they can.
    That too...
    Politics is like driving. To go forward select "D", to go backward select "R."

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    Let us not forget that gas is about 8-9 per liter in the UK.
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    Quote Originally Posted by rhvfd1214 View Post
    We should grow selected crops based on their oil content for the biodiesel.
    I'm not sure its a great idea to convert acreage used to grow crops used for FOOD over to crops used for FUEL. Especially with increasing concerns over climate-change/desertification/drought..etc.

    I'm all for finding a biological solution to the gas/fuel problem. Ideally we'd find a crop that could be used for both (sugar cane?).
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    when is my nuclear car going to come?


    That is the true question.....
    The Box. You opened it. We Came...

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    Posted by JHR..

    when is my nuclear car going to come?

    That is the true question.....
    It's already here!
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    Smile

    The United States is walking a tightrope on this international oil game within the global economy. Face it, the world is oil junkies. The United States Federal Reserve keeps printing dollars to drive the world economy but the dollar is in devaluation, as countries diversify away from the dollar. Citizens of the US are buying cheap imports to maximize their buying power while US dollars flee the country. US citizens generally do not save money. Wars are being fought over oil and to keep the world economy in pledge with the US dollar.

    The US had an earlier agreement with OPEC, oil exchanges would be in US dollars. Two thirds of world trade is dollar-denominated. Two-thirds of central foreign exchange reserves are also dollar-denominated. The majority of countries imports require dollars to pay for their fuel. Countries buying oil presently are required to keep US dollar reserves in order to purchase oil. Oil exporters similar keep currency reserve, billions in the currency in which they are paid. Currently, if any country wishes to obtain dollars with which to buy oil, it needs to sell its goods or resources to the US, (or take out a loan from the World Bank-functionally the same thing) or trade its currencies on the open market and thus devaluing it.

    How does the US get its dollar advantage? Imagine this: you are in deep debt but every day you write checks for dollars you don't have---another luxury car, a second holiday home, a trip of a lifetime. Your checks should be worthless but you keep buying stuff cause your check will never reach the bank. You have an agreement with the company that sales oil. Anyone who wants to buy oil in your agreement states that you may only buy oil in US dollars. This means everyone must hoard your checks so they can get more oil. Meanwhile, you write a check to buy a TV, the TV shop owner swaps your check to buy bread, the baker buys some flour with it, and on it goes until someone needs to buy oil again, round and round it goes and the check never goes back to the bank. Everyone want US dollars cause dollars buy oil.

    Now, let's say that I don't want to sell my oil in US dollars like Sadam Hussein said. I'm going to sell my oil in dinar or euro dollars or and will not accept US dollars for my oil. This is when the US told the world that Mr. Hussein was an axis-of-evil. This was a brushfire that could rapidly be fanned into a wildfire capable of consuming US economy and its dominance of world trade. The greenback's grip on oil trading and consequently on world trade is under serious threat. One of the first things done after the fall of Iraq was to once again start selling Iraqi oil in US dollars. Iran is accepting Euro Dollars for its oil exports. Iran has robust military capability. US has long term bases in Afganistan and Iraq. Iran has installed missiles on the Island of Abu Musa, and therefore controls the critical Strait of the Persian Gulf bound oil tankers must pass. The China goverment signed a huge oil and gas trade agreement between 70-100 billion dollars with Iran for its oil imports. Iran wants Euro dollars. President Bush thinks Iran has nuclear capabilities. Investors are shaken with the US dollar at this time,speculation has increased in other currencies, euro, Candian dollar, yen, or gold or silver. Meanwhile, US consumers retain a 95 percent trade imbalance with China. Twenty percent of the US borrowed debt is controlled by China. US jobs are being outsourced to other countries, including India. The US is exporting steel, lumber and other natural resources to China and India. Oil consumption in China and India is surpassing US oil consumption. Ten dollars a gallon oil? No, it is not out of the question.

    Well, some real **** is happening in the Middle East and around the world. The US is in a world economic meltdown, with troops, upon the horizon. The old saying, "The rich get richer while the poor get poorer" is closer than you think. My views as follows:

    Oil prices are increased twenty five percent due to speculation. In a perfect world, US consumers would stop buying imported toys and crap from Walmart, Target, Kmart and other discounters. In a perfect world, there would be trade balance. Americans would not live mostly off of credit and would start to save. The US, must demand alternate energy resources. In a perfect world, Americans, would have accountablity of their elected representives. Public elected office should be a duty, not a profession. No Congressman or Senator should be able to live or retire for their rest of their life at taxpayer expense. Give the President Line-Item-Veto. Demand excess oil profits go towards bringing down the national debt while freezing spending. The US Federal Reserve should be abolished, it is a broken tool that relies on taxpayer support, in-turn financing the good old boys private club. In a perfect world, there would be enough oil for everyone.

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