Gas prices: bad to worse. Predicting $3.75/gallon by summer

[flvegan]

Experts say it's only going to get worse. AAA predicts the price of regular unleaded gas will climb as high as $3.75 per gallon by July 1. Tom Kloza, chief oil analyst at the Oil Price Information Service in Lakewood, N.J., said he believes local prices could peak anywhere from $3.50 to $3.75.

A key predictor is the price that investors pay for crude-oil futures. On Wednesday, they closed above $100 per barrel for the first time in history. Seasonal changes also forecast increases. Gas prices normally start climbing in March, when oil refineries begin switching to their summer blends - federally mandated mixes that cause less pollution but are costlier to make.

So what's driving crude-oil prices skyward? Not supply and demand, although the U.S. Department of Energy said there are more refinery problems at the moment than expected.

Kloza identified three key causes: fear, greed and a fundamental change in who's investing. Hedge funds and other alternative-investment funds are speculating more than ever on commodities such as gold and oil. Kloza likened the broadening of the futures marketplace to that of the stock market, which used to be off limits to all but institutional investors and the wealthiest individuals.

More:
http://www.sptimes.com/2008/02/22/Business/Gas_prices__bad_to_wo.shtml

[snappyturtle]

1. It's already happening. Diesel spiked six cents in four days here (TX) to

$3.49 a gallon. I love the refinery excuse. How many years have the oil companies known their refineries weren't up to snuff? Billions in profits and no re-investment into old refineries; of course, they may figure they'll get more bang for the buck on dwindling global oil supplies this way.

[Arger68]

2. I agree about the refinery thing.

The refinery that burned did 67,000 barrels of oil per day. We use what, 21,000,000? Thats like 3/10th's of one percent of our daily consumption offline.:eyes:

[snappyturtle]

3. I think the oil companies are investing in alternative energy so they

can monopolize the emerging market. Either way we're cooked. We pay higher now for their R&D. imho