Why oil prices will spike again soon

CNNMoney ^ | 5/23/2011 | Colin Barr

[Signalman]

Energy prices have been coming down this spring as fears of a Middle East blowup fade. But persistent global demand, tepid supply growth and easy money mean it may not be long till the next damaging spike, Goldman Sachs economists say.

Oil prices could surge again by the end of 2012, economists Jan Hatzius and Andrew Tilton wrote in a note to clients this past weekend. They say the snail-like pace of global oil supply expansion – which Goldman projects at 1% or so annually – can't keep a petroleum-addicted world economy rolling without prices rising, perhaps sharply.

So don't get too used to paying a mere $3 and change for gasoline. Higher prices are on the way soon enough, thanks to stretched supplies and a Federal Reserve spigot that is likely to remain wide open for years to come.

"The fundamental story of increased oil scarcity is unchanged, and our commodity strategists now see distinct upside risks to their current forecast of $120/barrel for Brent crude by late 2012," Hatzius and Tilton write. "So the impact of scarcer oil and higher oil prices on economic activity remains at the top of our list of worries."

[thackney]

paying a mere $3 and change for gasoline

[RoadTest]

Don’t anybody - ANYBODY - blame the oil companies. It is the New World Order’s man Barack Hussein Obama that is devaluing the American dollar by blowing put our economy and shifting the American oil business to his Muslim friends overseas that’s pushing pump prices sky high.

[subterfuge]

aWhat a non-sensical, stupid statement. And for the record, demand has dropped in the last 2 years, exactly as OweBama planned. We use less, but it costs more. Thanks Comrade Barry Soetoro.

[Former Proud Canadian]

Thankyou. Yes, the GREEDY oil companies find the oil, drill for it, pump it out, transport it to refineries, refine it, transport the product to market, sell the product, employ people, pay their investors, and pay enormous taxes every step of the way.

The BENEVOLENT government leases the land to explore and drill, issues permits, monitors and harasses the producers every step of the way, mandates boutique gasoline blends, hamstrings the auto makers with rules, devalues the dollar, makes it impossible to produce domestically, forces ethanol blending, and collects and wastes taxes at every opportunity.

I think I see what the problem is.

[BooBoo1000]

This is pure unadulterated B/S/ Every tank at every Refinery is brim full of crude or finished product. The Oil companies have been running at full production. The problem is not the oil producers the problem is the G*&%D manipulator’s in New York. If Congress would get off of it’s dead A&& and investigate the commodity Market and the manipulation going on there in all commodities we would be well served. But that is too much to expect for Washington as they are the recipients of the reelection funds.

[pallis]

As long as the EPA controls our energy policies, high gas prices will continue.

[familyop]

"Higher prices are on the way soon enough, thanks to stretched supplies and a Federal Reserve spigot that is likely to remain wide open for years to come."

It's either that, or huge numbers of teachers and other government employees must be permanently laid off. Social Security and Medicare would have to be cut along with many other social programs for "women," etc. That's what sufficient cuts would make necessary.

Demand and consumption increases in east Asia and other countries as manufacturing and consumer economies increase. Oil exporters will increase, while our country declines economically. Be realistic, and prepare yourselves for these things.

[thackney]

Every tank at every Refinery is brim full of crude or finished product.

Not True.

[JimmyMc]

Two simple not envirinmantally PC...Drill and build more refineries. There has not been a new refinery built in the US in over 20 years.
Anyone interested in driving a Volt? I will when O'B replaces his armored Cadillac with a steel door plated Volt.

[JimmyMc]

Two simple not envirinmantally PC...Drill and build more refineries. There has not been a new refinery built in the US in over 20 years.
Anyone interested in driving a Volt? I will when O'B replaces his armored Cadillac with a steel door plated Volt.

[Post-Neolithic]

Good old Goldman Sachs. Every time oil starts to drop dramatically they come up with some story to get the price going skyward again.

Just like they did a couple of years ago with the $200.00 per barrel garbage when oil dropped to around $40.00 per.

Guess with all the money they are loosing they have to figure out some way to get it back.

[RoadTest]

Our Congress is like the late Roman Senate. It just rubber stamps what the Emperor does.