Several economic factors have combined to launch gas prices on an upward climb in the coming year. Crude oil futures passed $90 a barrel last week. Analysts say an improving global economic outlook and a devalued U.S. dollar have contributed to the escalation. Motorists are paying more than $3 a gallon for gasoline in many states and United States consumers can expect to pay increasingly more in the years ahead. Article source – Recent spike in gas prices the beginning of a long-term trend by MoneyBlogNewz.
Gas costs put stress on earnings
Average gas prices are over $3 a gallon within the U.S. It hasn’t been that bad since 2008, in October. Oil prices are also more than $90 a barrel for the 1st time since October 2008. The American Automobile Association accounts that from a year ago; there has been a 16 percent increase within the average costs within the United States for gasoline. There has been a 4 percent increase in just the last month. The average driver spent $305 on gas in Dec., according to the Oil Price Information Service. Another study from PortiaGroup found that buying gas used 7.6 percent of median household earnings in 2010, up from 6.5 percent last year and 4.2 percent after the oil shock of 2008.
Gasoline costs on driving
In November, Texas tycoon T. Boone Pickens forecasted the crude oil would start selling for $100 a barrel in 2011. The gasoline costs were already increasing when this was forecasted though. Pickens last forecasted oil at $100 a barrel in 2008. In July that year oil reached $145 a barrel. Gas costs within the summer of 2008 averaged more than $4 a gallon. Customers had to stop driving as much due to the price increases. As demand plummeted, prices adjusted accordingly. The demand has not changed with the December 2010 increases in gasoline though. An increase in trading activity for oil futures and a falling United States dollar are driving the current increase in gasoline prices.
Exactly where gas prices will maximum out at
Previous president of Shell Oil explained that gasoline prices will continue to rise in order to hit five dollars a gallon in 2012. John Hofmeister told Platt’s Energy Week that customers can expect gasoline costs to soar along with global oil demand. Other analysts agree that $5 a gallon gasoline is inevitable, however say the global economy won’t grow fast enough to reach that price by 2012. The Organization of Petroleum Exporting Nations explained in December that next year there will probably be a lower growth in global oil demand. The OPEC hasn’t increased any production even though oil has gotten close to $100 a barrel.
Articles cited
CNN
cnn.com/2010/12/27/markets/oil_commodities/?npt=NP1
Dallas Morning News
dallasnews.com/sharedcontent/dws/bus/stories/DN-energy2011_25bus.ART0.State.Edition1.36ce7e9.html
HR Morning.com
hrmorning.com/gas-price-outlook-not-good-for-your-commuters/
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