A year ago, Geology.com News had pointed to an article predicting that the price of crude oil would decline due to high rates of exploration and lowered demand. The prediction was a decline to as low as $30 a barrel. After last summer’s price spike, the price of a barrel of crude is now below $40.
Today, Geology.com News points to this article on the St. Paul Pioneer Press site: Expect higher gas prices down the road.
All that money you’re saving these days at the gas pump? You might want to put it in the bank.
The same cheap oil that’s providing relief to drivers and businesses in an awful economy is setting the stage for another price spike, perhaps as soon as next year, that will bring back painful memories of last summer’s $4-a-gallon gas.
The oil industry is scaling back on exploration and production because some projects don’t make economic sense when energy prices are low. And crude already is harder to find because more nations that own oil companies are blocking outside access to their oil fields.
When the world emerges from the recession and starts to burn more fuel again, higher demand meets lower supply and prices almost certainly will shoot higher.
Some analysts say oil eventually could eclipse $150 a barrel, maybe even on its way to $200. In such a scenario, gasoline would easily cost more than the record high of $4.11 a gallon set last summer.
It is time to start thinking differently about how we live.
Grace and Peace