Does anyone have any reliable information on the near future of gas prices? Are they going to keep going down, or maybe start going up again? It seems lately all they've been doing is going down... Why is this happening? !!!!!!!! I kinda liked it when they were higher... honest, people around me were starting to actually THINK.

They are already coming back up again, the european imports of refined product that were shipped from their reserves after Katrina have been stopped and should be about done working their way thru the system(it takes weeks). I think we are looking at $3/gallon by around february or sooner, should continue to climb all next year from there barring some sort of other incident. Here in columbus ohio prices bottomed at about $2.08/gallon, back up to $2.27 now and climbing every week a few cents at a time.

World growth of consumption is expected to rise about another 1-1.4 million bpd in 2006, which is more than produced in 2005 and more than can be produced unless something drastic happens. Plenty of heavy sour crude for sale at $32/barrel, but light sweet crude is heavily in demand.

The gulf region is still having serious issues from Katrina, most of the natural gas and crude production is still shutdown, wont recover for years.......those numbers are available at a govt website and are updated daily monday thru friday.

For daily oil news and related industries, try oil.com and energybulletin.net.

Did that fire in the English petrol depot affect prices?

Maybe a tiny bit locally in the UK itself, but after shutting off their reserves they were tapping and sending our way I doubt theyve got any big problems for the moment. Their accident wasnt all that big from what I read.

Even after what Katrina did to us, although wiping out a sizable chunk of production, it takes 3-6 weeks to see any changes, and imports have been able to keep up with demand, so far anyway.

I think the next eye opener we may see near term is natural gas prices, those should increase even more in the next month or two. If we dont have a cold long winter domestically gas prices shouldnt rise all that much and heating oil will go up but not by a bunch, natural gas is gonna go up no matter what. Natural gas doesnt just taper off like oil production does, it tends to just quit coming out and it happens quickly. Domestically we are hurting for natural gas supplies, Canada is saving us there.

any downturn is temporary.

Short term trends are always difficult to predict, as small perturbations can push prices either way. Long term trends are much easier to follow, and the only direction there is up-up-up.

Did that fire in the English petrol depot affect prices?

No, our little bonfire was mostly jet fuel. It caused some planes to be redirected to other airports due to shortages at Heathrow, but did nothing to petrol (gas) prices.

up,DOWN,UP,DOWN DEPENDING ON CASH NEEDED TO PAY FOR BONUSES AND GILTED PARACHUTES

My cager friends tell me that gas prices here are going up again rapidly. They were down almost to $2/gal., but are now around $2.20, I'm told.

A quick update, two years on from the OP's post:

"Gasoline price sets fresh record high in Japan

www.chinaview.cn 2007-12-12 21:56:14

TOKYO, Dec. 12 (Xinhua) -- The average retail price of regular gasoline in Japan increased by 0.60 yen per liter from a week earlier as of Monday, reaching a new record high of 155.50 yen (about 1.40 U.S. dollars) per liter for the second consecutive week, local media reported on Wednesday, quoting industry group.

The figure represented the all-time high since Japan's Oil Information Center began compiling the data in 1987.

The center attributed the price hike to major oil wholesalers' lifting of wholesale prices of gasoline for December shipments due to recent surges in crude oil prices.

The average diesel oil price also increased by 0.80 yen to an all-time high of 133.60 yen (about 1.20 U.S. dollars), the center said.


Editor: Jiang Yuxia

That works out to $5.30 a US gallon.

up,DOWN,UP,DOWN DEPENDING ON CASH NEEDED TO PAY FOR BONUSES AND GILTED PARACHUTES

And don't forget dividends. Be the man, own stock in oil, and good investment

For the USA, here is a good site:
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

Here is the latest chart; a definite and substantial slope:

http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_chart.gif

Concur that any downturn is temporary. The US really needs to start planning for extended high gas and fuel prices so that there's infrastructure available for cycling as there is in most parts of europe. My driving is minimal and really now gets to be more to get to places I go on rides now, but once it goes up too far, those will be curtailed as well. For the most part, I only use my car for shopping, family trips, and severe weather which would make cycling unsafe, still putting a tankfull of gas in the car once a month has steadily gone up and up and up over the past 5 years that I've tried to be car free.

Concur that any downturn is temporary. The US really needs to start planning for extended high gas and fuel prices so that there's infrastructure available for cycling as there is in most parts of europe.

What amazes me is that the US, for all its concern about homeland security, appears to have no backup plan for the not-entirely-unlikely possibility of a drastic reduction in refined oil supplies. If one or two Saudi oil facilities were disrupted by terrorist acitivity (or even a good sandstorm...), the US would be about the most severely hit country on Earth.

What amazes me is that the US, for all its concern about homeland security, appears to have no backup plan for the not-entirely-unlikely possibility of a drastic reduction in refined oil supplies. If one or two Saudi oil facilities were disrupted by terrorist acitivity (or even a good sandstorm...), the US would be about the most severely hit country on Earth.

what do you mean no backup plan ?

the fact is, the usa has more energy reserves stashed in the ground
as crude oil, coal, natural gas, geothermal (unlimited), and oil shale than we will need for the next 200 years.

when push comes to shove we'll be tapping our own supplies. the reason we haven't gone ape now
are environmental concerns and cost. crude oil is still cheaper and oil still tightly integrated into our factories. but when it becomes apparent that
the usa is threatened in a big way, we'll go nuts tapping our own energy. 100% clean coal technology already exists, and super cheap oil extraction from oil shale has been figured out. all we need is some pressure to make it the dominant way to get energy. we don't have that pressure yet.

there are no huge long term worries. solar panels already are in production for 1 dollar a watt. I mean long term, there are no worries. nada. zero. it's all figured out, it is just a slow process and slow changeover. in 200 years we'll still be using oil, and a boatload of solar. probably all consumer energy will be solar by then.

100% clean coal technology already exists, and super cheap oil extraction from oil shale has been figured out. all we need is some pressure to make it the dominant way to get energy. we don't have that pressure yet.

there are no huge long term worries. solar panels already are in production for 1 dollar a watt. I mean long term, there are no worries. nada. zero. it's all figured out, it is just a slow process and slow changeover. in 200 years we'll still be using oil, and a boatload of solar. probably all consumer energy will be solar by then.
I think we agree completely on this. The US plan is something like you describe... basically serendipity. If we keep belching out CO2 long enough, we'll trip over some promising technology and everything will be good to go.

Meanwhile, other countries seem to have invested in more reality-based scenarios.

i hope they go up. but only for tax reasons.

The number of players, fingers in the money pie, and gov't regulations
make predicting the price of oil futures a black art at best. NO ONE
really knows exactly what the price will be tomorrow at the pump
but those that can guess good will get very rich if they invest in
oil futures.

100% clean coal technology already exists, and super cheap oil extraction from oil shale has been figured out.


Where's the BS smiley when you need it...

100% clean coal technology already exists...

Really? Where can I read about that?

Does anyone have any reliable information on the near future of gas prices? Are they going to keep going down, or maybe start going up again? It seems lately all they've been doing is going down... Why is this happening? !!!!!!!! I kinda liked it when they were higher... honest, people around me were starting to actually THINK.

Gasoline prices are affected mostly by demand. Notice in the past three months, gasoline prices have actually gone slightly DOWN despite the fact that crude oil prices have gone up.

This is because there has been a slight decrease in demand since the rapid and recent rise in the price of gasoline. It appears that, in the short term, gasoline does in fact have elastic demand. That is, the American consumer actually WILL change their buying habits of gasoline as prices change. It was long believed that gasoline had inelastic demand in the USA because people in the USA are so dependant on gasoline for daily transport. What economists had not anticipated was that Americans do have some ability to change living patterns and save on some gasoline purchases.

I think USA consumers have just begun to show how much they can cut-back on fuel purchases. Now, people just cut back on their holiday driving and odd errands. Wait until people stop hauling their kids all over town for piano lessons, soccer, etcetera and decide that they can hire the piano teacher in their own neighborhood and let their kids bicycle to the LOCAL soccer team rather than the one across town. In the next go around, when people make automobile purchases, they won't be buying 7 mpg SUV's, but will look for automobiles that get 27 to 40 mpg. As inflation and rising fuel prices put more strain on the poor and lower middle class, they will start to ride public transportation and maybe even bicycle.

The USA can really make a big dent in fuel demand just by our citizens making some very little lifestyle changes.

That said, Gas prices in Japan are $6.50 per gallon and gasoline is $8.00 per gallon in England. In both countries, the roads and streets are bumper to bumper with personal automobiles driven by people who could be using convenient and low-cost public transportation. Thus, I am convinced that gasoline prices could go to at least $8.00 per gallon and people would continue to purchase it - of course, complaining about the prices all the while.

Really? Where can I read about that?

at universities

the technology exists, but is it deployed at power plant scales ? only in one research facility.

at universities

the technology exists, but is it deployed at power plant scales ? only in one research facility.

Sorry to be so blunt, but that's a crock, and I think you know perfectly well that it is. Otherwise, you'd be able to produce some documentation.

Gasoline prices are affected mostly by demand. Notice in the past three months, gasoline prices have actually gone slightly DOWN despite the fact that crude oil prices have gone up.

This is because there has been a slight decrease in demand since the rapid and recent rise in the price of gasoline. It appears that, in the short term, gasoline does in fact have elastic demand. That is, the American consumer actually WILL change their buying habits of gasoline as prices change. It was long believed that gasoline had inelastic demand in the USA because people in the USA are so Dependant on gasoline for daily transport. What economists had not anticipated was that Americans do have some ability to change living patterns and save on some gasoline purchases.

Good observation! I would like to back you up on that with this observation:

Gasoline demand is elastic, diesel demand is not.

When fuel price rise, gasoline and diesel rise in tandem. But when gasoline falls in price, diesel often will not, or will fall at a much slower rate. I think this is the explanation for this phenomena- By far the largest user of diesel fuel is commercial transportation. They have no more discretionary ways to reduce their consumption, and thus demand for diesel is very in-elastic when compared to gasoline use.

Good observation! I would like to back you up on that with this observation:

Gasoline demand is elastic, diesel demand is not.

When fuel price rise, gasoline and diesel rise in tandem. But when gasoline falls in price, diesel often will not, or will fall at a much slower rate. I think this is the explanation for this phenomena- By far the largest user of diesel fuel is commercial transportation. They have no more discretionary ways to reduce their consumption, and thus demand for diesel is very in-elastic when compared to gasoline use.

ChipSeal,
I think that is a large part of the equation, but you also have to figure in the heating oil aspect of it...#1 heating oil and #2 Diesel are pretty much the same thing, so if one is in short supply the other will take a price beating too.

Aaron:)

well, Bhutto got kilt & oil goes up...

I really think a lot of the high price of oil is currently due to 2 main factors more than anything else: speculation & the "risk premium".

oil wasn't a sexy place for investors to be since the last crash in the 80's. Now thanks to some global unrest & hurricanes a few years back, big money is continuing to pile on in the hopes of making bigger money.

i suspect oil (and most other commodities) will crash again. maybe not, as global economic growth is still pretty robust, so the argument can sure be made that high prices are due to high demand. however, if commodity prices continue to climb, it will eventually slow or reverse global growth, reducing demand, causing the price to fall...

and thus the cyclical nature of things continue ;)

cheers

ChipSeal,
I think that is a large part of the equation, but you also have to figure in the heating oil aspect of it...#1 heating oil and #2 Diesel are pretty much the same thing, so if one is in short supply the other will take a price beating too.
Aaron:)

No doubt this is true. I have spent my life in the western half of the USA, and so I have no direct experience with heating oil. My observation rests on what is visible to all who care to see: Prices posted daily at your local gas station in bright lights!

I have about 15 years of professional truck driving background up to 2006, so I was far more sensitive to this correlation than I have been since I left that line of work.

I think that THIS (http://www.futuregenalliance.org/) is about as close as we are to 100% 'clean coal' burning technology for the masses. Actually, it isn't really clean either, as all it does is sequester the emissions underground. FurtureGEN is going to be building it's first plant close to here in Matoon, IL over the next few years.

I know there are a lot of coal research labs around here in universities that are working on clean coal solutions like U of I (sorry, couldn't find a source) and SIU Carbondale (http://www.crc.siu.edu/), but we are by no means there yet.

however, if commodity prices continue to climb, it will eventually slow or reverse global growth, reducing demand, causing the price to fall...

cheers

acroy, interesting observation. Do you think it is possible that economic growth leads to price increases? If so, would price increases cause an economic slowdown, OR... does an economic slowdown result in lower prices? Hmmm.... makes you wonder.:)

acroy, interesting observation. Do you think it is possible that economic growth leads to price increases? If so, would price increases cause an economic slowdown, OR... does an economic slowdown result in lower prices? Hmmm.... makes you wonder.:)

yes to both - in a "perfect" economy price would be deteremined purely by supply & demand. In reality, speculation plays a big role, especially for oil but for all other commodities as well.

I read a few financial letters & try to stay semi-abreast of the world economy. I like to read MarketWatch, WSJ, Smart Money, etc. An interesting phenomenon in the financial press is that ever since commodity prices have been going up (2003 or so), the general consensus was that the high prices were "bad" and slowing growth.

So while they were indirectly (sometimes directly) encouraging people to jump in on the commodity market - further raising prices - they were also bemoaning the high prices as a growth impediment and have been assuming, and looking forward to the day, when prices would fall back to "normal" levels.

Well these high prices have stuck around for 3+ years now and businesses are getting more used to them, they are adjuting for the higher commodity prices. My company included, which uses aluminum, poly, fiberboard, and of course has to deal with increasing transportation costs.

this summer the idea was floated that the unrelenting high prices are due to unrelenting strong demand, and are thus an indicator of robust global growth. A positive thing. the argument can sure be made that the world has never seen global growth as in the last few years, especially with the BRIC countries and their huge populations starting to reach for middle class. The common projection is that the BRI countries will continue to grow (likely not as fast, but still grow), while the highly developed US and Europe continue to eke out 2-4% economic growth.

Growth of this global scale is unprecedented. Commodity prices may well stay high due to demand. However I suspect that since it only costs around $20-40 to produce a barrel of oil which is then sold for $90+, that there is a loooong way for the commodity price to fall....

Good observation! I would like to back you up on that with this observation:

Gasoline demand is elastic, diesel demand is not.

When fuel price rise, gasoline and diesel rise in tandem. But when gasoline falls in price, diesel often will not, or will fall at a much slower rate. I think this is the explanation for this phenomena- By far the largest user of diesel fuel is commercial transportation. They have no more discretionary ways to reduce their consumption, and thus demand for diesel is very in-elastic when compared to gasoline use.

I don't agree with this. Different modes of shipping things have different fuel requirements. Trucks are relatively inefficient, rail is better, cargo ships are better yet. Electrified rail is the best, of course.

Railroads have seen a lot of growth in the past few years - I suspect that this has been at the expense of long-haul truckers.

I don't agree with this. Different modes of shipping things have different fuel requirements. Trucks are relatively inefficient, rail is better, cargo ships are better yet. Electrified rail is the best, of course.

Railroads have seen a lot of growth in the past few years - I suspect that this has been at the expense of long-haul truckers.

Actually I think the growth has been overall with the loads being shared by both the truckers and the trains. Historically when fuel prices rise "non-critical" loads will be shifted to trains, causing a slight dip in the truck traffic, but recently because of the steady increase of consumption in this country, the numbers for both rail and trucking have climbed. FWIW they would have one helluva time delivering to my town via cargo ship:D I would love to see more stuff shipped via rail, every fully loaded rail car is 3-5 less trucks tearing up the roadways. With a bit of foresight there is no reason freight in this country should have to be trucked more than a few hundred miles and in many cases less than that. However we have become an instant gratification, just in time society and stores seldom maintain an inventory any more.

Aaron:)

(snip) However we have become an instant gratification, just in time society and stores seldom maintain an inventory any more.

THIS is the mindset that must change or.........else. :(:(

Here is the three month forward forecast:

By Tom Doggett

WASHINGTON, Jan 8 (Reuters) - U.S. consumers will pay record prices for gasoline this spring, with national monthly pump costs peaking near $3.50 per gallon when the busy driving season begins, the government's top energy forecasting agency said Tuesday.

Higher crude oil prices, which last week topped a record $100 a barrel, are pushing up motor fuel costs, the Energy Information Administration said in its new monthly forecast.

The price of crude oil now accounts for about two-thirds of the cost of making gasoline, according to the Energy Department's analytical arm.

Tight supplies caused by global oil demand growing faster than new oil production is behind higher petroleum costs. And consumers should not expect a break any time soon.

"Global oil markets will likely remain tight through 2008, then ease moderately in 2009," the EIA said. "Both motor gasoline and diesel prices are projected to average over $3 per gallon in 2008 and 2009, with monthly average gasoline prices peaking near $3.50 per gallon this spring."

The national price for gasoline jumped 5.6 cents over the last week alone and now stands at $3.11 a gallon, up 80 cents from a year ago.

High gasoline prices are cutting into consumer spending and raising business expenses, hurting a U.S. economy that is already suffering a slowdown.

The pain at the pump has also become an issue in this year's U.S. presidential election, with both Democratic and Republican candidates telling voters they know family budgets are being pinched and laying out their energy policies to tackle the problem.

U.S. gasoline use during the first half of this year will be higher than a year ago, but rising pump prices will reduce motor fuel demand growth by 20,000 barrels a day in the current quarter and by 10,000 barrels a day in the second quarter, the EIA said.

I think their price forecast will be low. How about you?

The EIA is nothing if not conservative, and usually wrong ;). They don't want any flak by predicting anything too scary or too optimistic.

I'm curious what they think will happen in 2009? Are the Chinese taking that year off or something?

Short term isn't just 2 years more like it is 20 to 40 years. Yes it is going up and will keep going up. Until it is high enough for the general public to be forced to change their ways against their wills. Then alternate sources of energy will come into play, stabilizing costs. See Adam Smith, "Wealth of nations".

I'm curious what they think will happen in 2009? Are the Chinese taking that year off or something?

I was (rhetorically) thinking the same. Reading between the lines I think we're looking at a prediction of 'demand destruction' by pricing the poorest demographics out of the market, but they're not willing to spell it out.

Just another inevitable step down the other side of the curve.

I'm curious what they think will happen in 2009? Are the Chinese taking that year off or something?

I believe the thinking is that demand will lessen some due to the higher prices.

I believe the thinking is that demand will lessen some due to the higher prices.

It looks like the American economy is headed for a recession, which would also lead to lower demand.

Demand is only one side of the equation. The other side is supply. If it becomes harder to get oil out of the ground, the price will go up, even if the demand drops.

Noticed that after the market's been hammered the last couple weeks, oil prices have dropped 10% as everyone assumes a recession is coming!
This is proof that commodity prices these days are fueled by speculation. The global economy has not changed 10% is 2 weeks - yet commodity prices fluctuate like mad.

any downturn is temporary.

It always goes down a little right after it went up a whole bunch.

It looks like the American economy is headed for a recession, which would also lead to lower demand.

I would go further and say that high gas prices is a major cause of the looming recession. I live in Michigan, where recession is starting to look like a permanent state of affairs. I don't think demand for gas has gone down much, but demand for other goods and services has deslined as people spend a bigger proportion of their income on gas.