Anyone want to bet that oil prices will rise?
Right now, per barrel oil prices have fallen below $100/barrel. Speculators are betting that Americans and others will continue to drive less and buy cars (if they can get credit – a big “if) that consume less gasoline.
But I’m betting oil prices will increase in the coming weeks.
OPEC met last week and decided to cut oil production by 500,000 barrels and may cut it more. They decided they want to keep prices at or above $100 a barrel.
That means we will not see gas prices fall much below $4/gallon again.
This alone is the major reason why we have to wean ourselves off oil. Oh, yeah, there are those who say that if we drill, drill, drill more we’ll see prices go down. Not so, folks!
Even if we drill everywhere, there are two reasons why the cost of gas will not go down.
One, we consume more than we can ever possibly produce. So we will still have to purchase foreign oil supplies. Bye, bye millions of dollars!!!!
Two, the length of time it takes to explore, drill, bring a well on line and produce a gallon of gas. Best estimates say it would take seven to 10 years to produce one gallon of gasoline from a new well. And, regardless of what Gov. Palin said, it will take until 2030 for a new pipeline from Alaska to be up and running.
Our best hope to reduce energy costs long term…
Immediately start a Manhatten project, as Silicon Valley CEOs have recommended, to eliminate the need, over the long term, for oil. That is the only way this country will become energy independent.