Department of Energy (and the Obvious) Predicting Higher Gas Prices
March 10th, 2007 | by Brian Carr |According to a recent article published on BusinessWeek.com, the Department of Energy is forecasting higher gas prices to continue to increase throughout the spring and into the summer, falling just short of the record highs set last summer.
It’s nice to see that one of our Federal Government agencies can get something right, despite how obvious the answer may actually be.
My political commentary aside, the DOE is predicting a roughly $.40 increase in gas prices through the beginning part of June. Considering the current national average price of a gallon of regular unleaded gasoline is currently $2.55, it looks like we should just fall short of last summer’s record high gas prices. That being said, I’m sure there are plenty of localities throughout the United States that will shatter last summer’s gas prices.
While I certainly don’t think this is particularly bad news (we seemed to get through last summer just fine when gas prices were higher than what’s predicted for this summer), I don’t think this is that great of news either. The fact that much of the reason last summer’s gas prices were so high can be attributed to mounting tensions between the Middle East and the United States is the reason I feel this prediction by the DOE may be on the low side.
Thankfully, during the past six months, tensions between the United States and the Middle East (particularly Iran) have appeared to be easing, and the so called “Nuclear Standoff” between Iran and the West has yet to happen.
Suppose something does spring up though. What then? Will oil prices finally hit the dreaded $100 per barrel mark? Will we be paying $4 or more for a gallon of gas? I know at this point all of this is hypothetical, but I certainly don’t think it’s completely out of the realm of possibility.
3 Responses to “Department of Energy (and the Obvious) Predicting Higher Gas Prices”
By Anonymous on Mar 11, 2007 | Reply
we get most of our gas from canada….not the middle east
By Brian Carr on Mar 11, 2007 | Reply
Yes, I realize this. However, I don’t think gas prices shot up last summer due to political instability in Canada.
By Fritz on Mar 13, 2007 | Reply
Our largest oil imports come from Canada, but the single largest single source of oil is still domestically produced. Of 7 billion barrels consumed annually, about 3 billion is produced domestically.
18% of U.S. oil comes from Canada, but a huge amount of oil still comes from “unstable” and unfriendly countries such as Iraq, Venezuela and Nigeria. When a couple hundred thousand barrels per day of production is shut out from Nigeria because of another kidnapping of oil company engineers or attack on oil facilities, that has a direct impact on our supply.