John Hofmeister attracted national attention in 2010 when he predicted that average U.S. gasoline prices would soar to $5 a gallon in 2012, thanks to rising crude oil prices. His forecast fell short, as the cost of filling up flirted with $4 in 2012, but never went higher.
Now, with gasoline prices at $2.14, their lowest level since May 2009, the former president of Shell Oil is issuing another warning, telling motorists that their joy ride may end sooner than they think.
"The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next," Hofmeister told me the other day after a trip to Calgary, where he was promoting natural gas as a transportation fuel.
"The triggering mechanism will be global demand growth relative to how much capital constraint gets baked into future plans for production this year and next. If new production capital is deferred and demand growth continues at 2% or more, we'll see capacity constraints during 2016, an election year of course, drive prices higher. Whether we reach $4 a gallon or push past, it's too early to tell."
Moreover, Hofmeister still sees $5 gas on the horizon.
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Like I said before, while gas prices are as low as they are they'll introduce new taxes and everyone will think, that's OK because the prices have come down so much. Then, before you know it, we'll be back to $5.00 a gallon and we'll be paying HUGE taxes on it because of the tax increase.
ReplyDeleteThese Liberals have been screwing us like this for years and it has to stop. Just like the rain tax in Salisbury. Oh, it's only $25.00 a year. YEAH, now it is but wait 5 more years and watch how high they raise it. Want to know why this will absolutely happen? Because the $25.00 a year will only raise $500,000.00 a year for the City. What do YOU think $500,000.00 a year will do for our crumbling infrastructure? NOTHING! While you shouldn't let Ireton and Council SCREW you on believing it's only $25.00 a year, you should stop the Feds from raising the gas tax as well.
$25
Delete$75
$125
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Get the idea.