Tuesday, May 6, 2008
$6.56 a gallon gas. Get ready.
Start your engines. Goldman Sachs predicts the price of oil could reach $200 a barrel in the next two years. It was only March 2005 when Goldman got laughed off the street for a nutty analyst predicting oil would rise to $105. What a whacko, people said. Now oil is $120 and rising fast.
Even better news comes from the cheery analysts at The Economist, who note Americans still pay less for energy than back in the 1980 heyday. Right when Jimmy Carter was leaving office, the U.S. spent about 8.0% of disposable income on energy bills vs. only 6.6% today. So, pull out a calculator, and gas prices would have to hit $4.84 to just break even with the real perceived cost back in 1980.
$200 a barrel oil would work out to $6.56 a gallon gasoline.
Not sure what your business is doing to consider the economy of spring 2009, but it may be time to ask the question -- what happens when consumers don't want to travel, cut back on energy and extras, and retrench into their homes? May not happen. But then, $105 oil wasn't supposed to happen, either.
Labels:
energy,
environment,
oil,
pricing
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