A number of sources indicate gasoline prices will rise much higher than $4.00 a gallon over the next three years, assuming the world’s economy gets back on track. For those who have lost their home, job and insurance, the news is especially bad.
May 26, 2009 – “At the Intergrowth Conference in Las Vegas earlier this month Boone Pickens predicted that the price of oil would be $200 a barrel within the next few years. He said that you can ‘bank on it.'”
Meanwhile, Saudi officials are saying that, “Oil prices could reach 2008 highs of near $150 per barrel within the next three years unless investments are made to increase production.” UPI, May 26, 2009. ‘Saudis predict soaring oil prices.’
Saudi Oil Minister Ali Naimi said, “We are maintaining our long-term focus rather than being swayed by the volatility of short-term conditions…However, if others do not begin to invest similarly in new capacity expansion projects, we could see within two to three years another price spike similar to or worse than what we witnessed in 2008.”
The oildrum.com provides a chart showing oil prices reaching $100 per barrel by late 2010 “as world liquids production drops further…High volatility of future oil prices is also expected due partly to delays in investment causing future oil capacity additions to decline sharply to 2012.” The chart shows oil prices rising to $200 per barrel by the end of 2012 as the supply of oil declines. So far in 2009, predictions on the price of oil have been below the actual price.
According to moneymorning.com, there are three factors that indicate oil prices will rise:
- OPEC has made substantial progress in reducing the amount of oil on the market.
- The dollar has been made vulnerable by the U.S. Federal Reserve’s aggressive policy of quantitative easing.
- And low oil prices and tight credit have reduced global energy investment, putting future supply at risk.
Exxon Mobil Corp: “The transition away from oil derived fuels is probably 100 years away.
“Petroleum-based fuels including gasoline and diesel, as well as hydrocarbons such as coal and natural gas, will remain the dominant sources of energy…because there are no viable alternatives…” Rex Tillerson, CEO. (Then we have a problem.)
Jeff Rubin, former chief economist and strategist at investment bank CIBC World Markets, declares “that the days of cheap oil are over, making the global economy unsustainable and turning back the clock on the way we live.”
His book, ‘Why your world is about to get a whole lot smaller: Oil and the end of globalization’, predicts the decreasing supply and constant demand for oil “will propel prices to highs not yet seen.”
“Within 12 months of an economic recovery I believe we will be encountering at least triple-digit oil prices. Certainly in the coming business cycle we will take out $147 a barrel oil and post new highs.
“We’re running out of cheap oil. We are scraping the bottom of the barrel. Sure there is 165 billion barrels of oil underneath the Canadian oil sands but you’re never going to be able to put that in your car unless you’re paying $7 a gallon.”
Rubin “argues that even with conservation measures, increased efficiency and the current economic downturn, the overall trend for oil prices is dramatically upward.”
China and India are the two nations leading the upward trend on oil prices. Business is booming in China. Its 1.3 billion people “are simply wild about cars.” Michael Dunne, “a Shanghai-based managing director of J.D. Power and Associates…says the surprising strength of China’s auto market has been driven not just by economics, but also by a kind of psychological shift that has come with prosperity.
“There is the thrill of individual mobility, going from point A to point B in their own time, and on their own terms. But it’s also an opportunity to declare and project their own success.”
Chinese, like Americans, prefer big cars, including the Hummer, now owned by a Chinese company. American auto makers are having success here. They and other foreign companies are doing relatively well in the “midsize and high-end part of the Chinese market”, leaving the low-end sector to Chinese automakers.
Despite the world recession, millions of Chinese,”for the first time, are able to enjoy a middle-class lifestyle comparable to many Americans.” (And now, American corporations are in the process of destroying the American middle-class. What a country.) Read the complete article . Didn’t we bail out GM and Chrysler? Oh, yes. GM is building another factory in China.
Both China and India will put tremendous pressure on world oil supplies, causing prices to rise. And there could be serious shortages.
But the United States is doing its part to use more oil and help drive prices up also. Obama, Congress, the U.S. Chamber of Commerce, “American” corporations, the Catholic Church, and various Mexican interest groups are trying to pass an amnesty bill for up to 20 million illegal aliens in our nation.
If that happens, those aliens will be legal and can qualify for Social Security and welfare. They can also sponsor relatives from Mexico “South”. Their presence will continue to bring down American wages since they can now apply for any number of jobs. The problem is there are millions of Americans out of work and the economy is in shambles.
Add to that the U.S. Census Bureau predicts 100 million more people will inhabit this nation over the next three decades, thanks to mostly third world immigrants and a high birth rate. They will consume a lot of resources, including oil and oil products. Do you think that will help us meet our oil needs? And is our government leading us over a cliff?