Richard Tafoya
May 8th, 2008, 06:37 PM
NY Sun:
http://www2.nysun.com/article/75363
Oil recently hit an all-time high of nearly $120 a barrel, more than double its early 2007 price of about $50 a barrel. It closed Friday at $118.52. The forecasts calling for a jump to between $7 and $10 a gallon are based on the view that the price of crude is on its way to $200 in two to three years.
Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston (http://www2.nysun.com/related_results.php?term=Houston)-based Dune Energy (http://www2.nysun.com/related_results.php?term=Dune+Energy+Inc.), Alan Gaines (http://www2.nysun.com/related_results.php?term=Alan+Gaines), sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla. (http://www2.nysun.com/related_results.php?term=Jupiter+%28Florida%29), Sean Brodrick (http://www2.nysun.com/related_results.php?term=Sean+Brodrick), projects a range of $8 to $10 a gallon.
While $7-$10 a gallon would be ground-breaking in America (http://www2.nysun.com/related_results.php?term=United+States), these prices would not be trendsetting internationally. For example, European drivers are already shelling out $9 a gallon (which includes a $2-a-gallon tax).
Canadians are also being hit with rising gas prices. They are paying the American-dollar equivalent of $4.92 a gallon, and they're being told to brace themselves for prices above $5.65 a gallon this summer.
Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines — in an impressive display of crystal ball gazing — accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.
His 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.
While Mr. Gaines thinks there could be a temporary decline in the oil price, he's convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China (http://www2.nysun.com/related_results.php?term=China), India (http://www2.nysun.com/related_results.php?term=India), and America.
http://www2.nysun.com/article/75363
Oil recently hit an all-time high of nearly $120 a barrel, more than double its early 2007 price of about $50 a barrel. It closed Friday at $118.52. The forecasts calling for a jump to between $7 and $10 a gallon are based on the view that the price of crude is on its way to $200 in two to three years.
Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston (http://www2.nysun.com/related_results.php?term=Houston)-based Dune Energy (http://www2.nysun.com/related_results.php?term=Dune+Energy+Inc.), Alan Gaines (http://www2.nysun.com/related_results.php?term=Alan+Gaines), sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla. (http://www2.nysun.com/related_results.php?term=Jupiter+%28Florida%29), Sean Brodrick (http://www2.nysun.com/related_results.php?term=Sean+Brodrick), projects a range of $8 to $10 a gallon.
While $7-$10 a gallon would be ground-breaking in America (http://www2.nysun.com/related_results.php?term=United+States), these prices would not be trendsetting internationally. For example, European drivers are already shelling out $9 a gallon (which includes a $2-a-gallon tax).
Canadians are also being hit with rising gas prices. They are paying the American-dollar equivalent of $4.92 a gallon, and they're being told to brace themselves for prices above $5.65 a gallon this summer.
Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines — in an impressive display of crystal ball gazing — accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.
His 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.
While Mr. Gaines thinks there could be a temporary decline in the oil price, he's convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China (http://www2.nysun.com/related_results.php?term=China), India (http://www2.nysun.com/related_results.php?term=India), and America.