Atlas Shrugged: The Mocking

Wednesday, May 21, 2008

This is why I drive a small, fuel efficent car.

Oil prices are heading to more than $141 a barrel in the next eight years,
according to futures contracts on the New York Mercantile Exchange, on concern
that growth in supply may fail to keep pace with rising demand.

You think? Considering oil is at $130, I expect oil to hit $141 in the next eight days, not years.

Let's say oil doesn't continue to go up $1/day. It goes up half that, 50 cents/day. By 1/09:

243 days x .50 cents=$121.5

For every dollar oil rises, gasoline rises .05 cents.

121.5 x .05=6.075 (let's say $6)

Gasoline is ~$3.50/gallon

$3.5 + $6=$9.5/gallon of gasoline

By the time Obama takes office, gas will be almost $10/gallon.

There are a lot of variables I'm not considering or don't even know about. If oil only goes up a dime a day, gas will only be about $4.70 a gallon, but that seems rather low. There could be many factors that make oil drop or rise, such as economic slowdown, discovery of more oil, release of stored oil, more/faster pumping, government action, conservation, speculation, hoarding and so on. However, most of these price-lowering factors would be temporary.

I think I'll get my bike out of the shed. I bought it two years ago in preparation, pretending I wanted the exercise. I didn't want anyone to laugh at me for predicting oil would rise to $100/barrel.

Added: Did I mention I have a dystopic view of the world?


Anonymous said...

Those guys could give Pollyanna a pep-talk! $141/bbl. in a mere 8 years?
Tell the NYME to save me the roach from that - it must be primo.

A dollar a day might be downright sluggish - & in a lot less than 8 years. Soon thieves won't hotwire cars anymore, they'll just siphon them dry ... the gas'll be worth as much as the ride.

I suspect the term "dystopian" will soon sound about as lucid as "oxygenist" or "pro-food" ... cheers!


aimai said...

sounds realistic to me.


Susan of Texas said...

I remember my parents buying a locking gas cap for the car during the gas cruch in the '70s. There were a lot of stories then about gasoline theft.