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Are We Headed For $5.00 Gas?

Posted in News, Newsworthy, Oil Industry, Travel by Kurt Ernst | February 26th, 2011 | 3 Responses |

When I made my car related predictions for the coming year, I said that gas would top $4.00 a gallon by the end of 2011. I also said that it probably wouldn’t slide back below $3.00 per gallon, as we’ve grown accustomed to over the years. Recent political unrest in the Middle East appears to have accelerated the timeline for that gasoline price jump, and energy tracking company DTN is predicting that it’ll rise even higher. In fact, they say we should be prepared to spend as much as $5.00 per gallon by this summer.

At issue is political unrest in Libya, which contains the largest known oil reserves in Africa. The current situation has reduced Libyan oil output by three-quarters, but OPEC still has a global surplus capacity of 5 million barrels per day. There’s concern, however, that political unrest in Libya will spread to other parts of the Middle East, eventually impacting oil supply. That concern alone is enough to drive up the price of crude oil, currently trading at near record highs of $119 per barrel.

I wouldn’t press the panic button just yet, but I would re-think buying a 40 foot motorhome about now. On the other hand, if you don’t have a motorcycle license, it may be a really good time to go and get one.

Source: Left Lane News

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3 Responses

  1. Richard says:

    Well.. I know i’ve commented before about the difference in gas prices between the USA and the Netherlands..

    I read in the paper today, we are headed to 1,75 euro per liter.. That means by this summer we’re paying 8,50 per gallon..

    So can we trade with you guys? Please? Pretty please =p?

    There goes my dream of buying a Charger haha..

  2. Bob says:

    On 2/25 one station was $2.21/gln while another not 2 miles away was $2.36/gln. Fear & price speculation are going to hit all of us in the wallet. If you have ExxonMobile stock you might break even.

  3. Mark Smith says:

    I really don’t know what you are complaining about. Although not on par with European prices, the People’s Republic of California is already paying prices over $4 per gallon in some places. I’m waiting for $6 per gallon, not $5.