"I'm predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices," John Hofmeister said in a recent interview with Platts Energy Week television.
Tom Kloza, chief oil analyst with Oil Price Information Service, agreed that Americans would see $5 a gallon gas but told CNN that he did not believe it would happen in 2012. "That wolf is out there and it's going to be at the door...I agree with him that we'll see those numbers at some point this decade but not yet."
"The demand is still sluggish enough in some of the mature economies," he said.
Hofmeister also predicted that demand would outstrip supply before the end of the decade.
"When supplies run low and the demand is still high, many areas will start to run out, with gas stations having no supplies," World News Insight observed. "Ultimately rationing could then come into force. We could be looking at a return to the 1970's."
Scary stuff, but personally all I think $5 gas would do is lead directly to another economic crash. It's no coincidence that $4.25 gas in July 2008 preceded the September 2008 meltdown by a matter of just months. High gas prices took out billions from disposable income, which had a major ripple effect. We're starting to see that same bubble build up again. Granted, to get to $5 gas around here in the Cincy area, we'd have to see oil hit $175 a barrel or so. Still, gas and oil prices have only gone up this winter, topping $90 a barrel on the way to $100.
We'll see where this goes.
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