Oil prices set for highest annual gain this decade
Well, it's not like we need to tell you that $3 gas is pretty much the new black. While the price of a barrel of oil hasn't broken the $100 barrier yet, it is sitting pretty at around $96 these days and the AP is saying that the high prices mean that the price of oil is set "for its biggest annual gain this decade as dwindling fuel stocks and growing concern over political turmoil offset the impact of a softening U.S. economy." You hear that, SUV drivers? At the beginning of 2007, the price of a barrel of oil was $61, which makes the annual jump almost 58 percent. As the AP so gently reminds us, "Oil's rally is entering its seventh year, more than quadrupling its market value of below $20 at the start of 2002." The average price for 2007 is going to be about $72.30, a nine percent jump from 2006 and way higher than analysts' predictions of a $63.23 average. For 2008, a "consensus forecast" sees an average of $77.62 a barrel next year. Wonder how right/wrong that'll look in 12 months.
Oh, and Happy New Year!
[Source: AP]
Reader Comments (Page 1 of 1)
TX CHL Instructor 8:46PM (12/31/2007)
Adjusted for the cheapening of the Dollar (inflation), the price of a gallon of gas hasn't actually changed much in the past few decades. The price of gas hasn't increased, the value of the Dollar has decreased. Inflation severely distorts the economic information of prices.
An ounce of gold will buy approximately (yes, I realize that it *does* fluctuate a bit both ways) the same amount of gasoline, or food, or clothing, that it would 30 years ago.
Yes, that is likely to change in the next decade, but the current excitement over the price of oil is a bit premature. There are valid reasons to be pushing for 'green' and economical alternatives to oil, but getting hysterical about distorted prices is not helpful.
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ug 10:41PM (12/31/2007)
Eventually when gas IS more expensive in adjusted dollars than it ever was during the last oil crisis, then finally the mental gymnastics above will no longer be an effective means of denial or rationalization for inaction.
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GreatGreenHammer 1:15AM (1/01/2008)
Ug..
Exactly where in TX CHL's post did he offer up a "rationalizatin for inaction"?
I suggest you re-read it. Pay special attention to this part:
("There are valid reasons to be pushing for 'green' and economical alternatives to oil, but getting hysterical about distorted prices is not helpful.")
Doesn't sound like a "rationalization for innaction" to me.
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terrence_bethea 5:25PM (1/01/2008)
While the price of oil is not the sole component in the price of gasoline, it would be foolish (or just bad arithmetic skills) to contend that higher pump prices are explained primarily by the weak dollar.
Simply put, global demand is up and production has not kept pace. Toss in the speculators and you largely explain the rise in the price of crude 'globally'. The increase in the price of gasoline is greater in the US than the Euro zone but that doesn't change the fact that EVERYBODY is paying more for gasoline . . . weak currency or not.
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Ivan Jackson 6:42AM (1/01/2008)
$3 a gallon!If your in the islands, Hawaii, it costs an average 20% more to fill your tank .Baffles me why more people haven't jumped on the gas and water alternative .It works, and the increase in miles to the gallon is unbelievable.
http://www.autoinformation.us.ms
It's Green too and cuts down emissions. Sounds too much like a "cure all" maybe. Gas will still be $3 a gallon (+) but the gallon goes a lot further!
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john1701a 10:17AM (1/01/2008)
"Adjusted for Inflation" is a red herring.
What difference does that value from 1981 really make in 2008?
It was a temporary spike, quite different from on-going high prices we are experiencing now. The supply & demand problem we face today has a permanent nature to it. Expecting a 50% drop afterward, like what happened back then, simply isn't realistic.
So why waste time on the topic?
Focus on the solutions instead.
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frank78 11:27AM (1/01/2008)
Whoever is forecasting an average $77 this year is going to be off more than they were off last year. The average will probably be in the low 90s, with a peak of almost $110. A slowing US economy may change those numbers down a little, but not much.
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