It may be the mother of all doom and gloom gas price predictions: $12 for a gallon of gas is "inevitable."
Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices on CNBC's May 20 "Squawk Box". He told host Becky Quick there was no single thing that would solve the problem, due to the enormity of the problem.
The prices that we're paying at the pump today are, I think, going to be ‘the good old days,' because others who watch this very closely forecast that we're going to be hitting $12 and $15 per gallon," Hirsch said. "And then, after that, when oil - world oil production goes into decline, we're going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we're not going to be able to get the fuel when we want it."
I personally think NON-OPEC producing countries will play a huge roll in lowering costs by upping their production....look at the chart below:
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I just heard the same thing on CNBC on Mad Money with Kramer...$12 a gallon in 1 year. According to Kramer, $5-6 per gallon by the end of the summer...
I heard one economics professor say this during a university commencement address........"Take a look at the gas prices you see today.......They are the lowest you will ever see them...ever...for the rest of your life."
Now, THAT is scary. So much for the 'extra things'...
I jsut watched the same thing. I wish these guys would shut up, they are a self-fulfilling prophecy. It scares the daylights out of me that this oil companies 5 of which were on Cap Hill made 36 billion, yes BILLION, in the first quarter this year
If gas gets much higher it will make alternative energy sources more attractive. Hopefully the free market will kick in and come with some reasonable alternatives.
naa. There have been rumors of oil companies that have been known to "whack" inventors that affect their bottom line. which is GREED!
That's pretty scary stuff. If that actually happens, the price of other goods will have to increase in price as well because all of that is moved from the point of origin into our homes or stomachs. Wages will have to go up to be able to pay for it. So really, what they're syaing is that spiraling inflation is on the way which, in turn, would cause interest rates to rise dramaticaly as the government tried to control it.
I'm sure gas prices will rise more but at some point consumers will stop using as much, out of necessity.
If these doom and gloomers think the economy is in recession now what they're predicting -- if it truly came to pass -- would make the Great Depression in the 1930s look like a boom.
I think they must be shooting for ratings myself. And Cramer is pure entertainment.
My guess on real estate is that there will be a major migration back to the CITIES!!!
Rationing, that is something we, as Americans, have never had to really think about. All things have been in abundance for most of us. I think THAT could really affect consumer confidence!
well that is certainly going to make the Denali expensive to drive...
imagine paying 150.00 bucks everytime you fill up? YIKES!!! CAN YOU SAY MASS REBELLION?
There may be some speculation in that market right now. I got out of oil when it hit $100 and am kicking myself...not that I had that much in it. However...over the long term this is undoubtedly what will happen. How fast is another question. My guess is that as people pull back -- reserves will increase and prices will go down - for a while.
The $10 million question is this: WHY won't the Saudi's pump more? Too greedy or it just ain't there to pump. If its the latter then we are in trouble. We knew it was coming. I thought we had about 2-3 more years before we hit this point...but the Chinese and Indians had other ideas - its their consumption that has brought this front and center so quickly..
updated
I guess I need to get my bike out of the garage and get the tires pumped up! Maybe this will help cure the obesity problem in the USA.
I am already seeing people moving from the outlying areas closer into town.
Just like gas higher gas prices was an idea in the minds of the powers that be, we will have to come up with ideas that will give us the level of comfort we want in life. We as Americans have always come up with solutions to the challenges we've faced. Can't wait to see what we come up with.
Thanks for the post Steve.
Cedric: good to hear from you...Great Comment! - come back again
STEVE,
I'm gonna get a hybrid...just my luck, they'll find a way to increase that.
I think that $5-$6 gas is likely, but not $12+. If it gets above $5 then the public will rise up and demand that the govt lift drilling restrictions in the USA. It will shut down the American economy and the govt won't allow it and the American people won't allow it!
in germany its the equivelancy of $8.00 a gallon