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I predict it will go up and then back down. Then it will go up again, and come back down again. A good way to predict gas prices is to practice using a yo yo.
They keep finding more and more massive oil supplies, so prices are not going to up up due to scarcity in our lifetimes. however they will bounce around due to investment speculators.
Indeed. It's like predicting the stock market.
It goes up.
It goes down.
It goes up again.
It goes down again.
Then it goes...
True there, although last time it was fairly effective.
I am writing this from memory so some of my numbers may be off a bit.
OPEC has never been able to mount a repeat of 1973-4 of 1978-80, when oil went respectively from $3 to over $12 in two months, and from $15 to $40 in about six months. In those cases an extremely small production cut could make the market leap, to quote one commentator, "like a frightened cat out of a bag" or words to that effect. Saudi Arabia is great at announcing that they are going to "flood the market" when the market is poised for a drop anyway, or that it is "supporting the price level" or cutting back when inventories are already thin, or Arctic blasts hit the U.S. northeast or Continental Europe. During the 1970's events, the markets were already poised on a knife-edge. Wage and price controls in the U.S., during both periods, exacerbated and possibly caused the shortages and price leaps.
When Reagan decontrolled oil prices eight days into his term I predicted, correctly, that oil and gasoline would plummet. That process took a month or so longer than I expected, but the magnitude was greater than I anticipated. WTI went from around $41 in January 1981 to as low as $25 or $26, if I recall correctly, in early 1983. A briefly effective OPEC accord restored a $32 or $33 price level, but then another drop took oil briefly under $10 in February 1986. Oil bounced back to around $18 that summer but until the Iraqi invasion of Kuwait bounced from $12 or so to around $18 or so. There was another trip down to the $10 level in late 1998-early 1999. These low prices did depress Western production, leading to the surge that brought oil briefly to $146 during July 2008. The period of historically high prices between 2004 and 2014, aided in part by the "Arab spring" in turn caused the germination of fracking and shale production. Oil has trended irregularly downward since then, with a recession bottom of about $33 in early 2009 that lasted a few days. The effective range has been $100, maybe a bit more on the upside, to around $40 on the downside. Now, with fracking solidly in the mix, in my opinion the price is stuck in that range.
That puts the range of gasoline, in the New York area, from around $2.40 a gallon during the dips and $3.20 a gallon during the peaks, with outlier stations being higher or lower.
Oil has trended irregularly downward since then, with a recession bottom of about $33 in early 2009 that lasted a few days. The effective range has been $100, maybe a bit more on the upside, to around $40 on the downside. Now, with fracking solidly in the mix, in my opinion the price is stuck in that range.
I think this is right. But any drop below $60 or above $80 tends to generate a reaction that pulls it back into the $60 to $80 range. I don't think prices below $60 or above $80 are sustainable given the current supply situation, as too many non-OPEC producers are able to adjust their output.
I think this is right. But any drop below $60 or above $80 tends to generate a reaction that pulls it back into the $60 to $80 range. I don't think prices below $60 or above $80 are sustainable given the current supply situation, as too many non-OPEC producers are able to adjust their output.
I tend to agree. $60 to $80 in November 1974 dollars maths out 12.26 to $16.35. Prices were in fact a bit lower around then, $11 to $12 or so. I think that period, after the first "energy crisis" and before the second one is the place to look for where prices would generally range. Maybe the range will pull a bit lower, say $55 to $75. The $40 price of January 1981 works out to $115 in today's dollars.
Fracking and other technology has increased the supply. The EU is going electric for automobiles reducing demand for gasoline & diesel. China is headed in the same direction to try to cope with their huge smog problem. In the US, fleet fuel economy keeps improving. Even full size pickups get 20 mpg on the highway at 65 mph. Industry has mostly switched from oil/diesel to cheap natural gas so demand is down. It's pretty easy to project out 20 years where USPS/UPS/Fedex use autonomous electric local delivery vehicles so the brown UPS truck with the VM Motori 6-cylinder diesel vanishes.
The United States and Canuckistan to the north are now very large oil producers. OPEC or political instability/war in the Middle East no longer have the same impact on crude oil prices. I don't think I'll see $5.00+ per gallon gasoline prices in the next decade where fuel cost impacts my life in any way. Beyond that, I think disruptive technology with autonomous electric vehicles and fast charging battery technology where range is no longer an issue will really limit the demand for gasoline.
I just paid $1.89 a gallon last week. Crazy. Hopefully everybody starts jumping into 80k Escalades and Range Rovers, gas prices go up, then I can buy one for a quarter of the price lol
It’s nice to not need to worry about fuel economy for a bit. I remember when gas was $4.50 a gallon back alittle less than 10 years ago. The Toyota Prius was one of the only main stream economy vehicles and it was rare that you saw one sit on the lot for more than a week.
It's coming soon - as in - by June? Your reply is too cryptic for me to understand!
Easy to understand jan. Soon and june sound the same james. So let me put it this way ray. Prices will be going up well before june. I have to buy oil in lots of 100k gals at a time. So i know what is coming down stream jean.
My prediction is that gasoline prices in the cheaper American areas (Midwest, South) will reach a nadir of $1.50/gallon. They are currently $1.90/gallon in my area. If there is an impending recession, and a severe one, then prices might stabilize in this region, before increasing slightly by summer. If the recession is mild, or there isn't one, then likely prices will return to the $2.50 range by the middle of 2019.
The point is that I'd not cheer low gas prices as some kind of spectacular savings. It's a sign of global economic weakening. I'd much rather see $10/gallon gas prices and a strong stock market, than $0.25/gallon gas prices and a brutal bear-market.
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Originally Posted by timfountain
Down and down. The economy is tipping over into recession as we turn the page on 2018 and that will drive prices down due to a reduction in economic activity and travel. It's going to get ugly.
Unfortunately, you may be right. The Great Recession witnessed a sharp reduction in American gasoline prices, and the 2001 recession saw prices in some areas dip below $1.00/gallon.
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Originally Posted by kyle19125
Leave it to Americans to obsess over something as minor as gas prices on the bottom line while health care, prescription meds and rental housing costs soar even higher....bigger fish perhaps?
Quite true! But gasoline prices are an obvious, tangible number. They affect rich and poor alike, young and old, large families and the child-free, liberal and conservative. So, they're a natural topic of discussion in the national discourse.
Quote:
Originally Posted by elnina
Gas was only 36 cents per gallon in 1970!
Quote:
Originally Posted by jbgusa
That would be $2.40 in 2018 dollars ...
Adjusted for inflation, the price of gas – as with the price of any other tangible thing – is near historical lows (other than the sharp gas-price collapse earlier in this century). What’s expensive is professional services (healthcare, legal representation, childcare, education) and in some locales, real-estate. Persons with a paid-off house, who don’t have kids in college and who are themselves decades out of college – but who are reasonably healthy, are going to find that consumer-prices are actually quite low. Indeed, for such persons, taxes (income, property, Social Security) may well dwarf out-of-pocket expenses for daily living.
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