After political unrest in the Middle East fueled global insecurity about oil availability, Americans shuttered (and sputtered) as gas prices rose above $3.70 per gallon. Now, experts are saying that we’re in for another “crude awakening” as the price of oil is poised to push $100 a barrel after a global economic rebound sent it surging 34 percent in the past year. This surge could send fuel prices soaring to $4 a gallon by summer in some parts of the country.
These increases will mean airfare, shipping, and food costs (not to mention commuting) will all become more expensive endeavors in the coming months. Economists are even saying that these rising energy prices will ultimately slow the country’s already tepid economic growth.
According to The Huffington Post, “The U.S. is the world's largest oil consumer, but prices since spring have been on a roll primarily because of rising demand in developing countries, especially China. China's oil consumption is expected to rise 5 percent next year; that compares with less than 1 percent growth forecast for the U.S. Benchmark oil for February delivery rose $1.54 on Friday to end the year at $91.38 per barrel on the New York Mercantile Exchange. It reached $92.06 earlier in the day, the highest since Oct. 6, 2008. Nationwide gasoline pump prices now average $3.072 per gallon. Gasoline expert Fred Rozell predicts that 15 states – including Alaska, Hawaii, Connecticut and Rhode Island – will see gasoline prices top $4 a gallon by Memorial Day. ‘A dollar more per gallon isn't that much – probably about $750 more per year for each motorist, but there's a psychological aspect to gas prices,’ he said. ‘People are going to be up in arms about this.’”
Even though the Organization of Petroleum Exporting Countries is capable of raising oil output if necessary by more than five million barrels per day in order to meet global increases in demand, experts estimate that the rising energy needs of highly-populated powers like China, not to mention other emerging economies reliant on fossil fuels, “will consume about half of that amount over the next two years. That could create supply pressures similar to those that preceded the price spike of 2008, when oil soared to $147 a barrel.”
While some believe it’s a long shot, the fear is, as articulated by some, including John Hofmeister, former president of Shell Oil and author of "Why We Hate The Oil Companies," is that Americans will end up paying $5 per gallon for gasoline by 2012—a scenario that could thrust the world into a global Depression.
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