Oil Spikes Above $100 a Barrel
Yesterday’s closing price for crude represents the first time oil's spiked above $100 a barrel since January 3. Analysts say there isn't a single factor to explain the move. Houston’s KHOU reports that a refinery explosion in West Texas and the possibility that OPEC will cut production next month are driving prices higher. Alon officials say the refinery in Big Spring, TX could be closed for as long as two months; company president and CEO Jeff Morris says the refiner should have contingency supply plans in the coming days. The company doesn’t know what caused the blast, but says it happened near a propylene splitter unit. As of early this afternoon, our friend Steve Austin over at Oil-Price.net pegs the current price of oil just under $99.50 a barrel. The website also forecasts the price of oil will be $129.04 a year from now. If so, it’ll be more bad news for consumers, automakers and the U.S. economy in general.
Glenn is a baby-boomer, born in 1954. Along with his wife, he makes his home in Connecticut. Employed in the public sector as an Information Tedchnology Specialist, Glenn has long been a car fan. Past rides have included heavy iron such as a 1967 GTO, to a V8 T-Bird. In between those high-horsepower cars, he's owned a pair of BMW 320i's. Now, with a daily commute of 40 miles, his concession to MPG dictates the ownership of a 2006 Honda Civic coupe which, while fun to drive, is a modest car for a pistonhead. As an avid reader, Glenn enjoys TTAC, along with many other auto-realated sites, and the occasional good book. As an avid electronic junkie, Glenn holds an Advanced Class amateur ("ham") radio license, and is into many things electronic. From a satellite radio and portable GPS unit in the cars, to a modest home theater system and radio-intercom in his home, if it's run by the movement of electrons, he's interested. :-)
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Unless demand levels off and drops. IF it keeps going up then 150 a barrel is next.
This is bad news for all of us, it not only affects Vehicles but also Homes heated with Oil, like many in rural areas! Natural Gas wont be far behind either, today Gasoline here in Ontario ranges from $1.06 per litre Canadian dollar to a high of 1.19 per litre. This is caused by Speculators in my opinion but I do think the days of "cheap Oil" are well behind us.
Expensive oil is good. Also, we should (like I keep saying) tax it more as well. Ground source heat pumps can heat rural homes cheaply. These will become more common. Because of BTU/pound efficiency, we should keep oil for cars, and better yet , airplanes. Using it to heat homes is a waste.
I've seen studies that have looked at the alternative cost of not having oil around, in the future, for all the things we'll miss when we're through burning it all up in IC engines. $129.04 is cheap in comparison. The fact that the price of oil is finally rising to more realistic levels will drive us towards exploring alternatives more effectively, including reducing the cost of heating and lighting/driving the technology in our homes. About time.