$5 a Gallon!

NY Daily News ^ | 5/03/2006 | Paul H.B. Shin

[ex-Texan]

As oil soars toward $100 a barrel, it's likely, experts say.

Tight petroleum supplies amid soaring demand could drive crude oil prices above $100 a barrel by this winter, energy experts warned yesterday.

That could translate into gas prices of more than $5 a gallon at the pump and spike home heating oil an additional 30%, analysts said.

Iran's deputy oil minister, Hadi Nejad Hosseinian, fueled the paranoia yesterday by predicting that crude could hit $100 a barrel by the end of the year - $26 above even yesterday's near-record price.

The problem is that Iran, the world's fourth-largest producer of crude, is just one of several hot spots in danger of boiling over, experts said.

"There's so much that could go wrong right now," said Phil Flynn, an energy analyst at Alaron Trading in Chicago. "This is the scariest time we've seen in oil in a long period of time."

In addition to the looming showdown with Iran over its nuclear ambitions, terrorists have repeatedly threatened to attack oil infrastructure in Saudi Arabia; Nigerian rebels have disrupted exports by 25%; Iraq is pumping out 30% less crude than it did before the war; production in the Gulf of Mexico has yet to return to normal after Hurricanes Katrina and Rita, and Bolivian President Evo Morales yesterday seized control of the country's oil and gas fields and gave foreign companies 180 days to agree to new deals with the government.

"We're on a hair trigger," said John Kilduff, senior vice president of energy risk management at Fimat USA, a New York commodities trading firm.

"Unfortunately for consumers, we're on the brink of [$100 a barrel] as we speak," he said. "It's been a parade of horribles."

U.S. Energy Secretary Samuel Bodman said the market is worried about a supply disruption, and "there's no doubt a [fear] premium" is reflected in today's prices.

Crude prices also are being pushed north by soaring demand from developing countries such as China and India, coupled with a razor-thin surplus capacity among exporters.

Bodman said high gasoline prices are a "crisis" for Americans. "It is a crisis in the sense of the individual," Bodman said after a meeting with the Saudi oil minister.

If crude hits $100 a barrel, gas prices could easily top $5 a gallon here and home heating oil could jump an additional 30%, Kilduff said.

"That would be quite painful," he added.

[ex-Texan]

"Unfortunately for consumers, we're on the brink of [$100 a barrel] as we speak," he said. "It's been a parade of horribles."

Unless you happen to own piles of oil company stock. Bad news for American consumers may be good news for people who own oil company stock.

[Perdogg]

It won't hit $100/bbl.

[Perdogg]

http://www.bloomberg.com/markets/commodities/energyprices.html

[xcamel]

[Cliff Dweller]

I'd take odds on that one!

I would venture that $100/barrel is the next plateau, and for the near term $125 the next ceiling in 18 months or so...

[sgtbono2002]

Yes Alternatives like all electric homes, and electric companies raising their rates 70%. Or gas heat with gas prices soaring.. Or wood stoves with communities outlawing the burning of wood. Yup a lot of alternatives , all of them expensive.

[JackDanielsOldNo7]

If it goes that high America will be in a severe recession. Except for Lee Raymond. Mark my words.

[rollo tomasi]

If gas prices get higher I will be awaiting the polls pushing price controls and collectivist leading the charge. Get ready to take one for the (envirowackos) team who seem to have control of our representatives and a lot of judges.

[Revelation 911]

If it goes that high America will be in a severe recession

agreed - and it will amount to a total pimp slap for both parties

[RSmithOpt]

"If it goes that high America the world will be in a severe recession. Except for Lee Raymond. Mark my words."

[edpc]

If it goes that high, people will demand oil wells and refineries in the US match the proliferation of Starbucks. It's time to marginalize the Greenies and use the resources we have.

[ConsentofGoverned]

"Yes Alternatives like all electric homes, and electric companies raising their rates 70%. Or gas heat with gas prices soaring.. Or wood stoves with communities outlawing the burning of wood. Yup a lot of alternatives , all of them expensive"
>>>>>>>>>>>>>>>>>>..........
the mass exodus of US citizens to warmer climes of Mexico - costa rica - panama and venezuela where gas is under 16 cents a gallon- will soon begin, I hope. just to get rid of the people who knowing gas prices were going up did nothing about their own lifestyle, did not invest in oil stocks, did not plan trips to save gas, went out and bought big homes to heat and cool, all the while being told day after day that high prices were coming..well now the demorats want to bail you out by going back to rationing at the gas pump ala jim carter the elder leader of the party and windfall profits taxes to reduce the oil co's ability to go out and drill for more oil, while still denying drilling on US land that would greatly reduce our need for mid east oil. The repub and dem politicos are pandering to those who think it's the government who can produce more oil and gas..lived thru it in the 70's and the same jerks are doing the same things that led to hyper stag flation of those Jimmy Carter days.
good grief.

[Puppage]

"Unfortunately for consumers, we're on the brink of [$100 a barrel] as we speak," he said. "It's been a parade of horribles."

Lets hear it for OPEC!!!

[ex-Texan]

Most people have very short memories. Many posting on FR were still in grade school in 1979. Back when grown ups were waiting in their autos, lined up for blocks to buy gasoline. Oil prices are driven by international speculators. Many of the same people who sell us oil play the speculation game. Double dipping increases the price. Read reports about oil prices? Television reports were pushing biodiesel last night at $ 3.08 a gallon.

[sgtbono2002]

Where do you live? Next to a Nuclear power plant?

Electric rates have been raised twice in two years here. the first rate increase was 27% and the second 30%. In some places it went up 70% last year.

[Finalapproach29er]

No reason not to attack Iran then, is there?

If we have to pay, make those bastards pay.

[kanawa]

I wonder how much longer the waste of oil as home heating fuel will go on, when there are so many alternatives.

When I was young there was a small opening in the side of the house for coal deliveries.