So we literally take over the middle east with strong arm tactics and don't reap the fucking benefits. this is the dumbest shit ever. read the VERY bottom of this article. I pulled the article from my work website at smith barney. this drives me crazy. we should have $1.50 gas right now. fuck everybody else, we are at war. "To the victor goes the spoils".
Gasoline could hit $7 a gallon in four years: CIBC
Crude predicted to top $200 by 2012 on tight supplies, pushing gas higher
SAN FRANCISCO (MarketWatch) -- Surging crude prices, which could surpass $200 a barrel in four years on tight supplies, could push gasoline prices to as high as $7 a gallon, CIBC World Markets analysts said Thursday.
Crude supplies are actually lower than some official estimates indicate, while demand is unlikely to fall anytime soon, according to a statement by analysts led by Jeff Rubin at CIBC, an investment bank. They forecast that these tighter supplies and continued strong demand will drive oil and gasoline prices to roughly double their current levels by 2012.
"It is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity," said Rubin. "Despite the recent record jump in oil prices, oil prices will continue to rise steadily over the next five years."
The front-month crude contract slid Thursday to $116 a barrel, after hitting a historic high of $119.90 a barrel Tuesday. Retail gas prices averaged $3.56 a gallon Thursday, according to AAA, a new record high. See Futures Movers.
Some analysts, however, said crude prices could turn lower. Standard & Poor's predicted Thursday that crude prices could tumble to about $90 a barrel by the end of this year with the U.S. economy struggling in recession, though the range of that forecast is plus or minus $50. See full story.
Overstated estimates
CIBC based its prediction on an analysis of crude-production estimates by the International Energy Agency, which the investment bank says has overstated supplies because the agency counts natural-gas liquids as part of the output. Stripping out natural-gas liquids, the global oil market is much tighter, and oil production will hardly grow, they added.
"While natural-gas liquids only account for 10% of total supply, they account for virtually all of the increase in petroleum-liquids production since 2005," said Rubin in a news release.
"Stripping out natural-gas liquids, oil production has not grown for over two years, which certainly goes a long way to explaining why oil prices have doubled over that period," he added.
The portion of natural-gas liquids in total oil production is increasing, from about 4% in the 1970s to an estimated 10% by 2012, CIBC said. Natural-gas liquids are not a viable substitute for oil and cannot be economically used as a basis for gasoline, diesel or jet fuel.
IEA, a Paris-based energy adviser to 27 developed countries, said in its April monthly report that global oil supply stood at 87.3 million barrels a day in March.
Strong demand
While supplies are seen tight, there is little evidence to suggest that there will be any reduction in oil demand, CIBC predicted, as demand growth outside the Organization of Economic Cooperation and Development offsets slowing demand in OECD countries.
Countries such as Brazil, China and Russia have seen surging sales of automobiles, while car sales in the United States and Europe have been declining or flat. Gasoline, diesel and other transportation fuels account for about half of the world's oil consumption.
CIBC predicted that by 2012, oil consumption in the rest of the world will exceed OECD. OECD countries currently consume about 50 million barrels a day of crude, 13 million barrels a day more than non-OECD countries.
Demand from major oil producers and exporters is also seen rising. Over the last three years, oil consumption in Organization of Petroleum Exporting Countries members has grown an average of over 5% a year. Combined demand from OPEC members, together with Russia and Mexico, already stood at about 13 million barrels a day, the world's second largest after the U.S.
"With production faltering, soaring rates of domestic fuel consumption will soon cannibalize export capacity," said Rubin in the report, adding more pressure to the world energy market.
Fuel consumption in some oil producing countries was partly boosted by extremely low prices. Retail gasoline was only about 25 cents a gallon in Venezuela and 60 cents a gallon in Saudi Arabia, Kuwait, and Iran.
