Gas prices in 2012? At least $4?

[suspectnumber961]

Peak Oil's Affect on Gasoline Prices in 2012 at Oil Price

Kloza notes that for the last decade gasoline futures prices, which ultimately determine pump prices, have risen from an autumn low to a spring high by an average of 83 percent. During these years, the annual winter-spring price surge has varied anywhere from 52 to 169 percent making higher prices by summer a fairly sure bet. This year the 2011 low for gasoline on the NY futures market likely will turn out to have been $2.44 a gallon on November 25. If one does the arithmetic using the average price jump of 83 percent, futures prices could be expected to top out in the vicinity of $4.46 a gallon next spring. Adding in the additional 60 cents to get the gasoline taxed and to the nozzle of your pump, we could theoretically be paying a national average on the order of $5.00 a gallon before the 4th of July. This of course assumes that nothing bad happens in the Middle East that restricts or seriously threatens the flow of oil exports and sends prices much higher.

The $5 scenario is too much for Kloza so he settles for a fall-to-spring increase of only 40-45 percent this year which has pump prices topping out between $3.90 and $4.25 a gallon. An increase of only 40-45 percent, of course, would be the smallest winter-spring price rally in this century, but $4 a gallon is something the average American has seen before and can comprehend - forecasting $5 gasoline for six months from now is simply not acceptable considering the economic and political havoc it would be likely to cause.

If the price spike of 2008 obtains, $4+ gasoline is the breaking point for many Americans. Driving will drop, new car sales will plummet, trucks and airplanes will be parked, and with them a big piece of the American economy will grind to a halt. Four years ago, the drop in gasoline consumption was so sharp that it sent prices down $2.40 cents a gallon to an end of the year low of $1.65 thereby freeing up billions of dollars that were going into gas tanks in July and saving the economy from much more serious trouble.

[NeilBlanchard]

Three factors that will probably affect the price of oil and gasoline:

Nigerian strike over the price they pay for gasoline, and the general dismal, nasty conditions they live in, even though they produce the most oil in Africa.

The sabre rattling in the Strait of Hormuz.

The discontinued price supports for ethanol.

Additional factors: more big spills, like the ones that Shell has all the time in Nigeria; greater demand from China in particular, and how the economy goes; based on demand. And yes, peak oil has been passed -- the tar sands are proof of this.

[suspectnumber961]

The ENERGY vs ECONOMIC feedback mechanism is now with us for good?

Energy prices UP...economy stalls...economy stalls...energy prices go DOWN?

Cheap energy is not there to fuel the perpetual growth scenario? So the DEBT overhang can't be "grown" away? Add in population growth and the increasing costs to deal with global warming and extreme weather....?

So it looks like there's trouble in River City.

About the only thing that might save us is that all those people who believe go ahead and float up into the air...thus reducing the load on the planet.....

[mattbatson]

americans will not stop driving at 5 dollar gas.
We were there before, and I saw no reduction in traffic...even on the weekends when it would be more "optional" to get in the car and drive.
Now, there was more interest in gas saving auto's, and people were buying up used highly efficient cars like they were hotcakes...

[Titanium]

My dad said he remembers paying 25 cents for a gallon of gas when he started driving. Gas prices will keep going up over the long term.

I talked to a guy who bought a brand new 1972 Chevy 4x4 truck for $5,500.00 in 1972. Now price what a brand new Chevy 4x4 cost today. Everything is going up price wise over the years.

[gone-ot]

...gas was 24.9¢/gal. at the corner Texaco station back in 1963 - 4 gallons for a buck.

[user removed]

I remember 12.9 cents a gallon, Eisenhower was president.

Rode the bike today, under 40 degrees, a little chilly but 75 MPG.

Paid a penny a mile in 1968, less than 5 cents a mile today. $5 a gallon at 75-80 MPG, still better than working for $22.79 for 40 hours take home pay and 32 cents a gallon.

regards
Mech

[GRU]

yes but back then you could buy a new car for $3000. Don't forget the inflation, yes fuel was cheaper but it wasn't 10 times cheaper than 30 years ago. When considering inflation it's probably 2 to 3 times higher than 30 years ago.

[suspectnumber961]

We are at the upper range when inflation adjusted.....? Currently...$4 and $5 are going to be NEW TERRITORY?

[Frank Lee]

Get used to it. CHEAPLY obtained gas supplies are not going up.