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