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Experts: $4 a gallon gas coming soon

heidiho
August 31st, 2005, 03:44 PM
NEW YORK (CNN/Money) - Consumers can expect retail gas prices to rise to $4 a gallon soon but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.

"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"

OPIS tracks wholesale and retail oil prices and provides pricing information for AAA's daily reports on fuel prices.

Brockwell said with gasoline prices now exceeding $3 a gallon before even reaching the wholesale level, it "doesn't take a genius" to expect retail prices to hit $4 a gallon soon.

"Consumers haven't seen the worst of it yet," Brockwell said.

He expects consumers in the Southeast and Northeast to be pinched first, following the impact of Hurricane Katrina on the Gulf Coast region.

Katrina pressures gas supplies
Katrina forced operators to close more than a tenth of the country's refining capacity and a quarter of its oil production, which sent gasoline prices surging.

Two major pipelines that supply gasoline to key terminals and distribution centers along the Eastern U.S. were shut down due to power outages caused by the storm. (Video of Energy Secretary Samuel Bodman discussing U.S. plans to tap strategic oil reserve to help refiners -- 4:16. Click here to watch).

Colonial Pipeline said it hopes to be back in partial operation soon, while the date of Plantation Pipeline's restart is not clear. Each day the pipelines are closed, supplies get backlogged and distribution centers must rely on reserves.

"With this kind of hiccup in refinery capacity, in stretched markets like California, you could see over $4 a gallon in gas," Evan Smith, an analyst at U.S. Global Investors, told CNN/Money.

While it's still too early to fully assess the damage caused by Katrina, efforts to build up inventories of crude oil, natural gas and other products like gasoline will be set back by the storm, according to Nariman Behravesh, chief economist at Global Insight.

In a research note, Behravesh laid out a worst-case scenario that puts average prices for regular unleaded gasoline at about $3.50 a gallon for the next four to six months.

"The impact on consumer spending in such a scenario would be very dramatic, cutting the growth rate by as much as 3 percent and pushing real GDP growth in the fourth quarter closer to zero," he wrote.

In a best-case scenario, he forecast retail pump prices to peak at $3 a gallon for a couple of months, but then fall back to around $2.50 by year-end.

The nationwide average price for a gallon of regular unleaded hit a fresh high of $2.619 Wednesday, according to AAA, the largest U.S. motorist organization, formerly known as the American Automobile Association.

Average gasoline prices have gained 40 percent in the last year.

Prices for crude oil are also up sharply and are currently hovering near record highs just under $70 a barrel.

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Is a gas crisis looming? For more, click here.

The U.S.

heidiho
August 31st, 2005, 03:45 PM
I Will Friggin Dieeeeeeeeeeeeeeeeee

Writing4Fun
August 31st, 2005, 04:02 PM
Watching Discovery channel last night, they're re-running the week in Japan series. Last night's show included the all-electric vehicle - lithium-ion batteries. The "race" model exceeds 300km/hour. The "practical" model maxes out at about 190km/hour, but can accelerate from 0 to 100km/hour in about 4 seconds (that would make it a lot easier to merge onto the highway, wouldn't it?)! Right now, there are only two that have been built because they're so expensive to build (several hundreds of dollars, most of which is solely for the batteries). With the way the gas prices are headed, I'm starting to think this car might be the more economical of the two solutions! :eek:

Actually, I'm all for bringing back the horse. Yee, haw!! :D

jessi76
August 31st, 2005, 04:14 PM
some other options...the hampster car...did anyone see the animal inventions show on Animal Planet a while ago? The #1 invention was a Hampster car. Yes, a car that was powered by hampsters. They ran around on little wheels, and generated power. It was some kids in Japan that invented it I think. Ok, it only went like 1 mph, but it did move.

The veg oil car... there is a company here that sells a kit to convert diesel engines to use veg oil, now veg oil is just as expensive as gas, BUT you can get it for FREE from restaurants that usually pay to get rid of the used oil. You just filter it, and viola, you're off and running and smelling like a donut.

Our prices went up 60 cents overnight, around $3.20/gal.

shannonRN
August 31st, 2005, 04:30 PM
Yee hah! Who needs gas? http://www.spacespider.net/emo/transport012.gif

At any rate, gas only jumped $.30 overnight here and we're still at $2.99. What a bargain. :rolleyes:

Rick C
August 31st, 2005, 04:39 PM
If I'm doing the math right, gas is about $3 USA per American gallon here in Calgary . . . . that's 95.4 cents a litre.

But I hear its about $1.10 to $1.24 in the Maritimes right now.

Rick C
www.goldentales.ca

gdamadg
August 31st, 2005, 04:49 PM
Here in Ontario it went to $1.30 in some areas. Here the average price is about $1.20.

For a country with one of the largest oil reserves, it's funny how something in the US can affect it here soo much.

Prin
August 31st, 2005, 04:52 PM
We saw 1.349 here in Qc today. The stations with 1.159 are swarming with people.

happycats
August 31st, 2005, 05:00 PM
It's $7.00 a gallon in europe!!! :eek: ( the euro is comparable to the US dollar)

raingirl
August 31st, 2005, 05:09 PM
Don't forget. All those cars that run on batteries, where do you think the power to recharge them comes from? Unless you have a solar power or wind power rig at your house, you are still going to be paying for a lot more hydro with an electric car.

jjgeonerd
August 31st, 2005, 07:11 PM
If I'm doing the math right, gas is about $3 USA per American gallon here in Calgary . . . . that's 95.4 cents a litre.

But I hear its about $1.10 to $1.24 in the Maritimes right now.

Rick C
www.goldentales.ca

That's about right...$3/gallon here in Seattle. Makes me like my motorcycle and its 40 mpg more and more!

Karin
August 31st, 2005, 07:16 PM
Monday am I paid $2.67 a gallon for 92 octane. The price still holds today..(I could've slept in instead of rushing to fill the car)
In Atlanta area the price has soared to $4.99 a gallon with a 10 gallon limit...this borders on gouging. The limit is understood...fuel is needed to get in and out of the storm zone and Ga. is one of the last stops before hitting that area from the east coast. I will top of my tanks again tomorrow to be on the safe side.

Law enforcement in the stricken areas are siphoning gas from abandoned vehicles to fill their cruisers...what a tough job. With no power fuel pumps will not work, besides the gas is loaded with water now.

It takes a stronger soul than I to do rescue work in this enormous disaster. We are being asked to conserve all over the country, one full tank will last me for a month...if I stretch it out. No problem there, I live & work here, I may get bored to death not being able to get out much so you all will have to entertain me for a while, sorry!....

Give this time please, it will work out. No matter where these disasters hit, they hit us all very hard...worldwide, the domino effect.

There is always someone worse off somewhere.

heidiho
September 1st, 2005, 12:09 PM
Gas in Arizona has hit 3.00 I have seen 3.09 ,i found a place where it was only for 2.63 i have an 04 sentra it costs me 35.00 to fil,that is alot for me..