Energy 02 May 2007 10:08 pm
If you like to drive (or you have to drive) you’re in trouble. Tight gas supplies mean rising gas prices. In the Southeast Wisconsin area where I live gas is comfortably over $3/gal. Analysts say current gas inventories are only slightly higher than just after Hurricane Katrina blasted the Gulf Coast. Expect the average gas price to top the record of $3.06/gal set in 2005.
We’re in a situation where too few refineries mean supply shocks when they go down due to fires or maintenance. High oil prices mean the oil companies have the cash to build more. It requires governments allowing them to build and locals rejecting NIMBY attitudes for the sake more gas. Or we just accept high gas prices and buy a Prius.
[Photo via Flickr]
Oil continued to fall as Saudi Arabia refused to go along with more production cuts. They want to see how the scheduled Feb. 1 cuts pan out. Oil is at its lowest price in 19 months, and has dropped 16% this already this year. We can thank a mild winter that lowered demand for heating oil. The lower price has removed some of the impetus for Congressional Democrats’ energy bill which would tax U.S. oil production to fund investment in alternative energy. Another effect with the lower prices is reduced demand for hybrid automobiles. We might even end up fatter.