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View Full Version : Gas Prices your prediction!



Christopher Pine
08-13-2005, 6:34 PM
As misery loves company and I find the other thread about gasoline prices very intereting. I want to pose the question at what price do you see gas prices leveling off and becoming somwhat stable? What I mean is there are all kinds of doom and gloomers saying it will hit $7.00 a gallon.. I think honestly and this is only semi educated opinion.. that the prices are too high now for what the supply is. That is our supplies are not this bad off. Not yet anyway and a large degree of the price increase is emotional! Yes emotional.. on the part of investors etc..
For example a year from now what do you think the normal price will be? will everyone be feeling like they got a deal if they pay $2.25 a gallon? OR will $3.00 be acceptable?

I personally think prices will be high for a while and even increase to national averages around possibly $2.80 or so a gallon. (I know some of you Californians are allready there but you are allways higher than the average)
ANd then we will no longer, like majic, have a probelm as long as prices stay high we will be supplied with all the gasoline we need.. This happened in the 70's.. Naive? maybe, but I have to believe the stuff about going out of sight prices like $7.oo a gallon is doom and gloom and not accurate not at least for 20 yrs or more...

Just some rantings..
what do you all think?

Chris

Jerry Clark
08-13-2005, 9:12 PM
I do think the gas will be $3.25 next summer-- and then may drop to $3--and in a couple years will be $5-- but there is no reason the oil companies should lower the price-- they are making huge profits and everyone is still buying all the make. China is one reason the prices is higher-- they want to import 25% more fuel EACH YEAR over the next 10 years. 10 years ago they were buying very little. China also bid on Unical but was out bid by Chevron, so we get the control here --- for now. Oil crude was $66+ on Friday! May go to $100 in the next couple years. And don't forget it only takes a couple million years to make some more crude.:cool:

Mike Cutler
08-13-2005, 10:39 PM
It will probably level out at about $3.00 nationwide as an average.
CA. may always be higher, but the next "reason" for hiking the price shouldn't really effect CA, as bad. The refineries have to stop adding MTBE in the next year, and it is claimed that this will result in a couple of million gallons less. CA. already doesn't allow MTBE, apparently. so the other states may see an 8-12 cent increase.
I don't see it going to 7 bucks though. The trickle down effect would be disasterous. As the cost of crude goes, so do other fuel and energy sources. In this, the era of electric de-regulation some place can expect rate increases simply to normalize utility rates with the price of oil, and be allowed to pass additional replacement fuel cost onto the consumer. kinda scary. Coal, propane and natural gas will also go up. Cordwood is already higher due to delivery costs
This winter should prove "interesting". A hard winter will drive the price of #2 thru the ceiling, and oil reserves will be tapped to meet any shortfalls. This will cause gas to be even higher next spring and summer.
Well. I don't have the solution I'm afraid. I'm not really sure that anyone does. Eventually the feds will need to step in and regulate the cost, just like electricity. The oil companies will need to ask for and justify rate hikes, instead of charging us for the replacement cost of crude in the future, today at the pump.
No more soap boxin' sorry folks
:o

Randy Meijer
08-14-2005, 5:19 AM
....Eventually the feds will need to step in and regulate the cost, just like electricity...

To a great extent, there is nothing the government can do about this problem. It is a matter of supply and demand. China and India and maybe Russia, I think, are drastically increasing their demand for crude and there is just less to go around so prices go up.....product goes to the highest bidder. Other problem is that there has not been a new refinery built in the US in many years.....maybe 20??.....environmental regs and the fact that no one wants such a thing in their back yard...makes them extremely expensive to build. So even if we have a bunch of affordable crude oil, and we run our refinerys 24/7, there gets to be a point where we just can't refine enough gas any more and the cost of a gallon climbs. I have no idea where it will end; but gas won't be gettinmg any cheaper anytime soon.

I read an interesting article....excerpt from a book.....author said there is still a lot of oil out there; but we are using it faster now and the remailing oil will be harder to recover. His estimate is that we have used half of all the oil that exists in the world. The first oil well ever drilled was in 1859, so we have used up half of the worlds oil supply in 150 years±. The other half won't last nearly as long and as it starts to diminish in availablity the global society is likely to change. Globalization will slow tremendously.....people won't travel between countries as much....or even between states...because the energy to fuel travel will be to expensive. Big international and national companies will break up and become more localized again because of travel difficulties. Big farms will disappear and farming will become more of a local activity as it will be too expensive to ship California vegetables to New York And big energy guzzling tractors will lie idle as more farming reverts to the old ways of smaller farms. No more 24/7 society....we will get up with the birds and shut down at sundown.....no energy to run the society from sundown to sun-up.

The guy had a lot of interesting and worrysome ideas. Some of it may come to pass.....a lot of it probably won't. If anyone is interested in reading the book, I'll post the title and the author when I get home from the weekend.

Frank Hagan
08-14-2005, 11:06 AM
There's another view ... that the rise in prices makes the extraction of the oil locked in oil shale and oil sands in our nothern mid-west states and Canada much more attractive. Canada has the second largest proven reserve of oil, second only to Saudi Arabia, but extracting it is expensive (you have to heat the sand to melt the oil out). Canada now exports more oil than it consumes, mostly to our mid-western states. (see http://www.eia.doe.gov/emeu/cabs/canada.html)

Those of us who remember the gas lines of the 70s also remember that we only had about 10 years of proven oil reserves left. But when the price rose to over a dollar, exploration increased and the profit motive made it easier to justify taking more expensive measures to extract oil. So now the "peak oil" people say we have oil to last for another 20 years or so ... but I think that's short sighted. They aren't considering the opportunities that rising prices give us.

I'm looking at a Prius for my (soon to be) 40 mile commute each way to work. Just found out today that the new highway bill will give about a $3,000 tax CREDIT for purchasing one if I delay until after 1/1/2006. I think I'll wait a few months!

Curt Harms
08-14-2005, 1:25 PM
There was a survey or poll which indicated people would start to change their driving habits when gas hit $3/gal. Anyone for $2.99? :rolleyes:

Curt

Dennis Peacock
08-14-2005, 7:05 PM
I read an interesting article....excerpt from a book.....author said there is still a lot of oil out there; but we are using it faster now and the remailing oil will be harder to recover. His estimate is that we have used half of all the oil that exists in the world. The first oil well ever drilled was in 1859, so we have used up half of the worlds oil supply in 150 years±. The other half won't last nearly as long and as it starts to diminish in availablity the global society is likely to change. Globalization will slow tremendously.....people won't travel between countries as much....or even between states...because the energy to fuel travel will be to expensive. Big international and national companies will break up and become more localized again because of travel difficulties. Big farms will disappear and farming will become more of a local activity as it will be too expensive to ship California vegetables to New York And big energy guzzling tractors will lie idle as more farming reverts to the old ways of smaller farms. No more 24/7 society....we will get up with the birds and shut down at sundown.....no energy to run the society from sundown to sun-up.


I think that author is a lot closer to being CORRECT than any of us are willing to admint.

Mike Cutler
08-14-2005, 8:15 PM
Randy. You brought up a number of good points. I think that the book you were referring to, would be an interesting read.
When I said the the feds would need to step in, in wasn't so much to set the price as the profit, and tax.
Each state taxes gasoline at a different rate.The profit is strictly speculative, and not market driven. I think eventually the feds will need to act to simply limit the guaranteed profit on oil, and standardize the tax.
It's kinda hard for the cynic in me too buy the supply demand argument. As a kid growing up in So.Cal I remember the gas lines, I also remember that every inland marina would sell you as much gas as you wanted for your boat. We used to fill up the ski boat at the marina, haul it home and pump the gas into the cars. The boat held eighty gallons. I'm not sure of the object lesson here, but there must be one :rolleyes:
I was just commenting to someone the other day that, here it is, the year 2005, in the most advanced country on earth, and it is cheaper for me to heat my house with a woodstove, than any other means. Something is wrong.
Oh well. I thought I was done soapboxing. Sorry for the rant folks.