Gasoline could be $5 a gallon by 2012, former SHELL OIL pres warns
Just a reminder - oil is a limited resource, and the reason oil companies are drilling the hard-to-get oil in places like the bottom of the gulf, is because we have already used half of the earth's oil - AND IT WAS THE BEST HALF!
The oil that is left is more expensive to get, more expensive to refine, and the gasoline and fuels we refine from it will be more expensive for us to use.
That's why the price of oil just crossed the $90 a barrel mark, for the first time since the economic collapse started.
Leading to things like this - the former presidenty of the Shell oil corporation is warning that gasoline will likely hit $5 a gallon by 2012.
Ex-Shell president sees $5 gas in 2012
NEW YORK (CNNMoney.com) -- The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.
In an interview with Platt's Energy Week television, Hofmeister predicted gasoline prices will spike as the global demand for oil increases.
"I'm predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices," he said.
Tom Kloza, chief oil analyst with Oil Price Information Service says Americans will see gasoline prices hit the $5 a gallon mark in the next decade, but not by 2012.
"That wolf is out there and it's going to be at the door...I agree with him that we'll see those numbers at some point this decade but not yet." Kloza said.
What is going to happen is this - as the economy improves, the price of oil will inexorably climb again, placing a growing stress on the fragile economic recovery which will probably lead to further collapses as the increased root costs of energy flush out more of the financial crap and trickery that has taken the place of real wealth productivity in the US economy.
This is what the peak oil community claims happened in 2008 - the increased price of energy caused by $140 a barrel oil forced people to call in their markers - leading to the collpase of an economy based on selling houses with cheap credit.
It will happen again.
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How high will oil go in 2011, CNN asks
The price of oil is much discussed these days - here's a few snippets from another CNN story, this one more general...
This is the problem - we've built an american economy based on financialization and consumption, rather than the production of real goods and real value. As the price of fuels rise, the money that we consumer americans spend on consumer toys and entertainments has to be spent on transporting our bodies to the reduced number of available jobs.
That means less for the consumer economy - and BANG the economy starts to collapse again, and more jobs are cut, and the corporations move more of the real wealth out of the country to countries that have cheaper workers with fewer protections and needs.
Bull vs. Bear: How high will oil go in 2011?
Some economists believe that if prices rise much more, especially past $100, it will likely dampen America's already slow economic recovery. As the price of crude rises, so does the price of gasoline, and a higher price at the pump will hurt consumer spending overall.
So where will oil go in 2011? Will it surpass the psychologically significant $100 mark at a time when demand for oil from most emerging economies is expected to rise? Or will it retreat as China tries to rein in growth amid worries over inflation?
Here's a look at the bull and bear arguments for the black gold next year.
Bull: The other side of $100
A growing number of traders and analysts think prices for crude oil will stay relatively high – with some predicting it could top $100 a barrel sometime next year.
A few factors will probably support prices in 2011, according to analysts at JPMorgan Chase (JPM) and Bank of America Merrill Lynch (BAC). The banks forecast that prices could climb past $100 a barrel next year
Now here's an interesting snippet - written in typical financialeze - that is very telling, yet at the same time is written in such a way as to be essentially deceptive. Here's the snippet:
Analysts there say non-OPEC countries and Russia have for years slowed production of crude and supply appears "anemic." With limited supply and stronger demand coming mostly from emerging economies, prices are poised to stay relatively strong.
What does this appear to be saying, or implying? That the "non-OPEC" countries have _intentionally_ slowed production. No, that's a lie. They have been FORCED to pruduce less oil, because the decline of their oil fields is happening faster than they can bring new wells online, and what new wells they can bring online produce LESS OIL of lower quality that the once-good wells which are in decline. (That's the "supply appears 'anemic'" part)
AND, the same thing is happening with the OPEC countries too. But you wouldn't know that by reading this snippet, would you? Just like how none of the "experts" were able to be honest about the shoddy state of the banks in 2007 and 2008, none of the "experts" that are allowed to write for the corporate news sources like CNN are allowed to be honest about the state of the oilfields, because their salaries are indirectly paid by the oil corporations and the financial corporations.
Expect oil prices to jump. Gasoline will follow. You better get mentally prepared, because the expensive oil age is here, and here to stay.
Oil price rises 30 percent in 2010; gas prices could hit $4 soon
The price of oil is sitting just below $92 a barrel today - and the dramatic incrase in oil prices this year - a 30% or more increase from the lowest to the highest prices in 2010 - is likely to continue and lead to $4 a gallon gas by spring, or so says Yahoo finance...
Gasoline expert Fred Rozell predicts that 15 states -- including Alaska, Hawaii, Connecticut and Rhode Island -- will see gasoline prices top $4 a gallon by Memorial Day. "A dollar more per gallon isn't that much -- probably about $750 more per year for each motorist, but there's a psychological aspect to gas prices," he said. "People are going to be up in arms about this."
Higher oil prices have fattened oil company profits. Excluding BP PLC, the four other major investor-owned oil companies posted combined profits of $59.7 billion in the first nine months of the year, a 49 percent increase from the year before. Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp. and Total SA are expected to earn $81 billion for the full year.
The fifth oil giant, BP, was held responsible for the largest offshore oil spill in U.S. history and booked $39.9 billion in charges related to the disaster. Excluding special expenses like the Gulf of Mexico spill, analysts say the company will still earn $20.2 billion in 2010.
"There's nothing this industry can't survive," Oppenheimer & Co. analyst Fadel Gheit said.
http://finance.yahoo.com/news/Oils-surge-in-2010-paves-the-apf-1258480888.html?x=0
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John Hofmeister, former president of Shell Oil and author of "Why We Hate The Oil Companies," predicts Americans will pay $5 per gallon for gasoline by 2012. Other experts say that's a long shot.
"That means oil close to $200" per barrel, analyst and trader Stephen Schork said. "We can see it, but we could also see a global depression, too."