$5 Gas By Labor Day?

[RedEarth]

If gasoline prices move from their current average price of $3.20 to $5, the cost of fuel for a family that spends $50 a week for gas would move up over $1,000 a year. That would wipe out any tax rebate payments from the Federal government and drive the economy deeper into its currently slowdown. It would also further fracture already delicate P&Ls and balance sheet at large auto makers and airlines. Retailers would get less traffic. Very few industries would be spared some effect.

Rising oil prices cannot be fixed by the Fed, That means that the most crushing blow to the economy, higher fuel prices, is largely beyond the control of the government. Rising crude is driven by futures speculation, the falling dollar, and an imbalance of supply and demand.

The supply issue is the most permanent and the most vexing. Tremendous consumption of oil and diesel in China is underwritten by the government which buys high-priced oil and then refines it and markets it at below market prices. China does this so high fuel prices will not dampen GDP growth which is running at 10% a year. China is also building a 100 million barrel strategic reserve to cover the country for 30 days in the event of a major interruption in supply.

Further straining supply, oil producing countries are keeping more crude in their home markets to handle building out infrastructure and provide gas for a growing number of cars.

OPEC has rejected US pleas for raising production and the president of the cartel says he expects oil to stay at current price levels through the end of this year. That stands against a market where oil demand has gone up 1.5 million barrels a day for the last ten years.

http://www.247wallst.com/2008/03/5-gas-by-labor.html

[jaksavage]

1. good nt

[AndyA]

2. Stop shopping at Wal-Mart.

Stop buying foreign cars.

Demand retails start selling more American-made goods.

There are things all of us can do.

Yes, it is hard to find things that aren't made in China. Seek out local sources when you can, and when you must buy foreign, make sure to express your displeasure to the store manager. If enough people do this, the word WILL get back to those who can do something about it. With retail sales dropping, retailers will be anxious to respond to customer needs.

Even though your Toyota may be built in the United States, the corporate ownership is overseas, and ultimately that is where all the profits wind up. Don't support foreign companies, support American companies. Yes, I know American cars have lots of foreign parts on them, I know some are made out of the country, etc., but the bottom line is we need an "America first" mentality instead of a "me first" one.

People who shop at Wal-Mart because they think they can't afford to shop anywhere else don't realize that what they save is spent putting gas in their car. Wal-Mart is a huge consumer of Chinese goods, and putting a dent in that will lessen demand for gas in China. They will do the same thing Americans are doing, cut back on driving, which will reduce demand.

The difference is, our government isn't looking after us the way the Chinese government is. Our government is only interested in protecting the profits of the oil companies.

And we need to change that as well.

I feel good about being an American. I don't shop at Wal-Mart. Ever. And I drive American cars, and I find their quality and reliability to be as good as my neighbor's foreign cars, or better.

[Captain Angry]

5. What do you drive?

I'm driving the Ford Escape Hybrid. It's union built in the USA, and the home office is in the USA as well. There are definitely better MPG vehicles out there than mine, but none of them carry the type of stuff I have in the places I go.

Unfortunately, it's the only union built hybrid. I wish Ford/GM would produce a hyperlight vehicle with a decent battery for commuter traffic. Build it here in the States, and actually lead on something instead of following.

I've been so happy with it. I think I've had to take it in 2 or 3 times since I bought it in early 2005 for an unscheduled maintenance event. Otherwise, it's 5000+ miles between oil changes, etc.

[MISSDem]

6. Amen. I also do not shop at Wal Mart and I drive an

American car. My car is a 1993 and still runs great so there you go.

[dipsydoodle]

3. Given that the average

UK annual usage cost is based on c. 12000 miles @ 30mpg, which is 400 gallons @ currently $10 <£5> / gallon , $4000 I can only suggest you get used to it.

With regard to supply : if you had a non replaceable commodity what would you do ? Sell it now or keep it until the price was even higher.

[Skittles]

7. you cannot compare prices in England to prices here

we get NOTHING for what we pay for gas and I could not even use mass transit to go 50 miles to my boyfriend's house without either walking or taking a cab for 18 of the miles....I grew up in England but now live in Texas, where you could fit FIVE Englands.

[depakid]

15. "I could not even use mass transit"

Therein lies the dilemma.

Even if you live in urban areas, in most of America, viable mass transit either doesn't exist- or doesn't have routes to where people need to travel.

Not so in Britain and other countries- and as a result, they're far better prepared for the inevitable price rises. Several years from now, $5.00 per gallon may well be the floor price for petrol, rather than a ceiling.

[Captain Angry]

4. Increasing oil production would not decrease gasoline costs.

Oil needs to be refined.

Refineries are not running at full capacity.

Some are shut down, some are damaged. Some are shutting down to spike prices.

So doubling the amount of oil waiting in line to be refined will not decrease the refined gasoline's price if it can't be refined any more quickly.

We could reduce the amount of gasoline we use, thereby reducing the demand for it. On a personal level, we can try to do it. On a local level, we should have been investing in mass transit. On a national level we should have been investing in the technology to reduce consumption of fuel (i.e. safe, lightweight, high capacity batteries for electric cars).

[sce56]

8. It has gone up over 50 cents in one month here! At that rate will be at $5 before July I seen it for

$4.00 already here in LA.

[sce56]

12. A few more pictures

[GTurck]

9. In the seventies...

the president did put a cap on gas prices.
I am sorry to sound old but in fact the president does have the power to tell the oil companies to lower their prices. It was considered a national security measure back then and it should be now. No company is going to go under if they don't get the money they want but it would certainly help all the rest of us.

[drexel dave]

10. We're going to see a lot of big sagging skin that used to cover globs of fat

on bodies forced to ride bicycles.

It's going to look like a gastric bypass war zone here.

[ihavenobias]

14. This problem highlights how awful public transportation is in most places in the US

It's truly pathetic and inexcusable. It's so obvious but I almost NEVER hear it seriously discussed on the news.

They talk about people walking and biking, but they rarely talk about trains and buses. Instead of this "economic stimulus" giveaway, we should use that money to start a giant mass transit project. I know it takes time, but if we don't start soon, when will we?

[zonmoy]

11. I do shop at wal mart.

but I don't own a car at all. I shop there because I am on disability and have to make ends meet on what I get for that and what work I can handle.

[tpsbmam]

17. You know.....

I got into big arguments with friends in the Dean campaign when he made a statement about shopping at Walmart (he was, of course, against). I thought it was highly insulting to many people (voters) who have to do their best to make ends meet, even if it means shopping at Walmart. It's a reality for many, many people. I lose some respect for people who can more than afford to shop elsewhere and choose to go to Walmart, but I know too many people for whom Walmart prices mean the difference between eating 7 days a week and eating 5 days a week.

[stimbox]

13. Only solution is to nationalize the oil industry.

We need to reverse the oilization of our government.

[lostnotforgotten]

16. Real Driver Is Peak Oil - We Have Reached The Point Where

Oil production will no longer grow whilst oil demand increases.

This is all about geology. We have now consumed half the worlds endowment.

Did you know that new oil field discoveries "peaked" in the 1960s?

In other words we use more oil every day than we find new to replace it.

Want to learn more?

http://www.theoildrum.com/node/3726