Rising Gas Prices Brewing Perfect Storm

Robert Farago
by Robert Farago
rising gas prices brewing perfect storm

“You’re adding an oil shock on top of a crunch on credit and a housing collapse. Even the U.S. economy cannot withstand all of that at the same time.” Nigel Gault, an economist at Global Insight, didn't mention falling new car sales or millions of endangered auto loans in his analysis of the impact of rising U.S. gas prices. But then, he didn't have to. It's been clear for years how this one will shake out, with truck-heavy domestics losing both sales and market share. The New York Times says that when it comes to American gas prices, the only way is up. "Energy specialists predict that, as demand picks up further this spring and summer, retail prices will surpass the high of $3.23 a gallon set last Memorial Day weekend." Surveying the supply, demand (both international and seasonal) and production equation, AAA spokesman Geoff Sundstrom reckons we could see $4 a gallon gas this summer. “We’ve gone from a worrying situation for gasoline to one that is quite alarming." Meanwhile, automakers placing their bets on oil burners will not be happy to read that "on Tuesday, diesel prices rose to a record $3.60 a gallon, compared with $2.62 a gallon last year."

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