Gas Heading for $10 A Gallon?

Robert Farago
by Robert Farago
gas heading for 10 a gallon

If so, stick a fork in Detroit. And federal mpg regulators will look like geniuses, as the free market stampedes to high mileage vehicles. As Captain Picard might say, what will make it so? Writing for The New York Sun, Dan Dorfman relies on three analysts for his, uh, analysis. First up, Troy Green of the American Automobile Association. The trip-A guy's forecast "calls for" (perhaps not the best choice of words) a jump to between $7 and $10 a gallon in two to three years, based on $200 a barrel crude. The chairman of Houston-based Dune Energy is slightly more optimistic. Alan Gaines sees gas rising to $7 to $8 a gallon on Arrakis. I mean, stateside. Weiss Research commodities trader Sean Brodrick projects $8 to $10 a gallon gas. Like any good financial pundit, Dorfman hedges his cred. "His [Gaines] 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." [thanks to jthorner for the link]

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  • Ppellico Ppellico on Apr 29, 2008

    OK. So by disagreeing with the scare tactic crowd, I get acused of putting head in the sand. So be it. This has always been the come back. But there is no way to strike back. I cannot confront blind faith. Nothing is harder to deal with than the True Believer.... But I will insist that global warming, although Gore Faithful keep shouting, has not been proven as damaging or even as confrontable as shouted. Let alone proven that BAD MANKIND is responsible. And I recently heard more experts warning of an actual cooling of the Earth that actually spells greater trouble. Hmmm...what to do and whom to believe!? Oil shortage? Brazil just discovered two of the worlds largest oil fields IN HISTORY. OK...what now? I listened to experts on the news today trying to explain that there was actually plenty of fuel to meet todays demand and they simply could not explain the speculation. Yes, I am sorry...but speculation is MORE than a small part in the oil price today. That, and the fact that every spring the refineries find a reason to shut down facilities for maintenance. And another sorry government interference note...we actually would have MORE refineries IF the do-gooders would NOT have placed so many obsticles (read restrictions) into the construction. It has become, like our nuclear plants, ridiculously expensive to build with their regulations. Yes, heating oil would be cheeper IF we had more nuclear power...thus gas would be as well. So, thank you weirdos. Thanks again to all those crying wolf yesteryear and today...when they actually play(ed) a huge part in the entire affair that we have. As a side many are aware that there have been five...yes 5...periods in earth's history where nearly the entire population (95%)of life had been wipe clean off its surface. Really, makes you feel really powerful, right? Panic, everybody!!!

  • Ppellico Ppellico on Apr 29, 2008

    One more thing... Yes, like everybody who reads TTAC, I am a really sick car nut. I actually have 5 cars and am always on the look out for another. Really looking forward to the new diesels coming in. By the more big big shout out to the do-gooders that placed such restrictions on the diesels , thus forcing them off the market. Thanks, really. And one more thing yet again... p Please somebody tell me what the government tax on fuel or gas is in Europe. I understand THIS plays the biggest part of the pricing in the socialistic states they have. PLUS...why, if they are so environmentally aware, do THEY get diesels and not us!?

  • Phil Ressler Phil Ressler on Apr 29, 2008
    It's as if they represent people that live in a different country. I live in Los Angeles, but I am from the east coast, through the first decade of my working career. In March I attended a conference in New York City; Manhattan. The morning I left from LAX, a headline broke on saying that UCLA's econometrics group forecasts no recession in 2008. This is a group that has an excellent track record for economic prognostication over the last 15 - 20 years. They did outline a number of threats that could derail their forecast, but the gist was that we'd avoid quarter-over-quarter decline. It might feel like recession to some people but overall, no recession. I boarded a JetBlue flight (first time; yeah, the ads oversell it) and for the next four hours flipped around the usual array of financial news channels, most coming out of New York. The reporting and commentary was saturated with gloom. The newspapers were just as negative when I landed. Oh, yeah, the Eliot Spitzer hooker story was breaking too. By the time I landed at JFK, the crumbling mood was palpable. I slipped into a cab, immediately engaged by my Russian immigrant cab driver on the sorry state of the economy. "What you think; will U.S. survive this?" Huh? "Bush, Congress do nothing. Eight years ago, it cost me dollar gallon to fill my tank in my cab. Now over three dollars!" I pointed out that eight years ago, gasoline was cheaper in real dollars than it was in 1969. That wasn't a sustainable reality so no use pining for $1 gas in 2008. He shrugged. "You have point." I asked my driver whether he'd be better off driving a cab now in Moscow or in New York. Would he have a better life in Russia? "New York of course! Moscow worse in every way!" I said I think the U.S. will survive this situation; I'd seen worse before. By the time we rolled up to my hotel, my driver's mood had shifted a bit. "You say you fly from L.A.? Maybe should move there. Everybody I drive from there seem more -- what do you say -- optimistic." Yeah. Maybe. Did I mention that gasoline in California costs even more than it does in New York? Phil

  • Landcrusher Landcrusher on Apr 30, 2008

    Phil, Your comment makes me think that maybe the economic news is even worsely exagerated than usual because right now it's NY itself looking at hard times due to the financials all laying off to recover from their lunacy. So much of our news comes from NY.