Former oil exec: $5-a-gallon gas on the way

[acri1]

Former oil exec: $5-a-gallon gas on the way

John Hofmeister attracted national attention in 2010 when he predicted that average U.S. gasoline prices would soar to $5 a gallon in 2012, thanks to rising crude oil prices. His forecast fell short, as the cost of filling up flirted with $4 in 2012, but never went higher.

Now, with national gasoline prices currently averaging $2.05 a gallon, their lowest level since early 2009, the former president of Shell Oil 06is issuing another warning, telling motorists that their joy ride may end sooner than they think.

"The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next," Hofmeister told me the other day after a trip to Calgary, where he was promoting natural gas as a transportation fuel.

"The triggering mechanism will be global demand growth relative to how much capital constraint gets baked into future plans for production this year and next. If new production capital is deferred and demand growth continues at 2% or more, we'll see capacity constraints during 2016, an election year of course, drive prices higher. Whether we reach $4 a gallon or push past, it's too early to tell."

Moreover, Hofmeister still sees $5 gas on the horizon.

"Over the next several years, as demand growth approaches 100 million barrels a day and the industry production falls short, yes, I believe later this decade we'll see $5 a gallon and possible shortages of fuel in some parts of the world," he said.

Hofmeister paints a gloomier picture of gasoline prices than many analysts, including the U.S. Energy Information Administration, which predicts U.S. gasoline prices will average $2.33 this year and $2.72 in 2016. But he also feels that the perception of a "glut" in world oil production now is overstated, with supply outpacing demand by only 1 million barrels a day or so.

Some of his former peers in the oil sector share his sentiments regarding the oil oversupply, and its impact on oil prices.

"Most of us in the industry are surprised that it's fallen as hard and fast as it has," Ryan Lance, CEO of ConocoPhillips, said at a Center for Strategic and International Studies. "I don't know that I have a real good answer to that question, other than it doesn't feel like the fundamentals would support that kind of fall."

Like Hofmeister, Lance said oil prices could rebound faster than anticipated, as they did in 2009, following the Great Recession.

"People were worried about the global economy, and prices went to $30, $40 a barrel, and just a matter of months later, it was back to $100 a barrel," he said. "And that's the kind of volatility we're in, when we see these imbalances that are created, even though they are relatively small in absolute terms."

Still, Hofmeister sees a solution to end the roller-coaster pattern to oil and gasoline prices: natural gas.

Since retiring from Shell in 2008, he's been actively promoting natural gas as a transportation fuel, as the head of an organization called Citizens for Affordable Energy.

"I believe that with the right focus and development of the natural gas fuels market, we could begin to reduce global demand for oil from the 100-million-barrels-a-day level around 2020 to lower demand levels by substituting natural gas fuels," he said. "We could pull it back to 90, 80, even 70 million barrels a day over the next two to three decades, taking enormous pressure off chronic high oil prices."

In the meantime, though, his advice to motorists regarding gasoline is simple: "Enjoy the price, because it's going to go back up."

Really hope he doesn't know what the fukk he's talking about, really been enjoying these gas prices the last few months.

 

[Type Username Here]

"The buyer determines the price"

One of the dumbest shyt I've ever heard on here. Motherfukkers out here like the diamond industry just controlling their supply as they wish.

 

[Spidey Man]

I feel bad for them fools that thought the low prices would last forever and brought gas guzzlers. I sold my 08 civic and got a 15 altima. Nice upgrade and still good on gas

The prices will go up. That's inevitable but I do hope he's wrong about 5 bucks a gallon. I can see them shooting back to the prices they were last year

 

[eXodus]

5$ a gallon

Welp abt to cop that Ford Fusion Hybrid then

 

[Kill Dat Noize]

"The buyer determines the price"

One of the dumbest shyt I've ever heard on here. Motherfukkers out here like the diamond industry just controlling their supply as they wish.

this dude talkin about the "growth of demand" as if the demand isn't always the same.

NEWSFLASH: WE NEED GAS!

 

[jadillac]

I said this on here weeks ago and ppl said I was dumb.

Sure supply/demand is partially responsible for the low gas prices, but the real thing is the auto-industry. They're gonna make ppl think it's safe to buy big trucks/SUV's again, then they're gonna spike the prices on them.

 

[Serious]

Subs

 

[MenacingMonk]

 

[Bunchy Carter]

I feel bad for them fools that thought the low prices would last forever and brought gas guzzlers. I sold my 08 civic and got a 15 altima. Nice upgrade and still good on gas

The prices will go up. That's inevitable but I do hope he's wrong about 5 bucks a gallon. I can see them shooting back to the prices they were last year

Those 15' altimas are nice.

 

[newarkhiphop]

this dude I just filled my gas tank for $25

 

[ORDER_66]

$5 gas a gallon

 

[Hawaiian Punch]

Really hope he doesn't know what the fukk he's talking about, really been enjoying these gas prices the last few months.

Lol @ 'former' Oil exec.

http://mediamatters.org/research/2012/11/05/media-hide-john-hofmeisters-oil-interests-as-he/191152

Hofmeister Is Currently A Director At Lufkin, Hunting PLC And CAMAC. John Hofmeister is a Director at Lufkin Industries, Inc. and the Senior Independent Director of Hunting PLC, both of which manufacture products for oil and gas extraction. Hofmeister is also listed as a director at CAMAC Energy Inc., a U.S. based oil and gas corporation that has operations in Nigeria. Hofmeister owns a significant amount of stock in both CAMAC Energy and Lufkin Industries, according to filings with the Securities and Exchange Commission. [Hunting PLC, accessed11/5/12] [Lufkin, accessed 11/5/12] [CAMAC Energy Inc., accessed 11/5/12] [U.S. Official News, 6/14/12, via Nexis] [U.S. Fed News, 9/26/11, via Nexis]

Media Fail To Disclose These Current Oil Interests. According to a search of Nexis, media outlets have never disclosed Hofmeister's current oil interests while hosting him. Hofmeister is often identified as a former Shell Oil President. [Nexis search, 11/5/12]

Hofmeister Misled Viewers On Gasoline Prices Over A Dozen Times In 2012. In 2012, CNN, CBS, Fox News and Fox Business hosted Hofmeister to criticize the Obama administration's energy policies and suggest that a lack of domestic oil production is to blame for high gasoline prices.

And on and on and on...

Sell fear that you profit from brehs..

 

[muzikfrk75]

Oh the annual "$5/gallon gas is coming" threat

 

[DEAD7]

 

[88m3]

that would be nice but it isn't going to happen.