Tuesday, March 18, 2008

Increasing Gas Costs...

...are just beginning to take place according to this article:
Goldman Sachs said $175 a barrel crude "represents the price level required to maintain trend economic growth against our anaemic supply growth forecasts, assuming growth in the U.S. [economy] re-accelerates early next year.”

Late last month, Matthew R. Simmons, chairman of the Houston-based investment bank Simmons & Co. International, actually predicted that oil prices could climb as high as $378 a barrel – characterizing current prices in the $100 range as “preposterously cheap.”

To underscore his point, Simmons told the Arabian Business news service that in the United Kingdom capital of London, gasoline can sell for as much as $9 a gallon. And even that doesn’t deter motorists from driving their cars.

Prices at that level don’t “seem to have slowed anyone down. It works out as much as $378 a barrel. Yes [I can see it reaching that high]," he told the news service.

Just last week, the International Energy Agency (IEA) warned last week the era of cheap oil had ended. In fact, only a sustained global recession could send oil back down below the $60 a barrel level for any length of time.