Gasoline Prices to Approach $5 Per Gallon by 2010!
If experts in the oil and gas and financial services industries are on target, Americans should expect to see fuel costs rise during the remainder of 2009. In particular, they should expect to see gas prices approaching $5 per gallon by 2010.
Among the driving forces responsible for the price increases is the rising cost of manufacturing crude oil and, in turn, gasoline, according to John Felmy, chief economist for the American Petroleum Institute.
During a conference call this morning, Felmy told bloggers and journalists that, during the past eight weeks, the cost of manufacturing crude had increased by 64 cents per gallon and the cost for producing gasoline has jumped 61 cents per gallon. He added that the recent annual introduction of summer gasoline formulations, which are slightly more expensive, also contributed to the pump price as has a reduction in output by OPEC.
Felmy’s prediction dovetails with one offered 11 days ago by the folks at Goldman Sachs. The financial services giant predicted that the price of a barrel of crude oil — which is equal to 42 gallons — will jump to $85 by the end of the year and push up to $95 by 2010.
At the time of the Goldman Sachs prediction, it equated to a whopping 31 percent increase. Translated into at-the-pump gasoline costs, Americans should expect to pay well in excess of $3 for a gallon of regular gasoline within six months.
In South Carolina, the state with today’s lowest average gasoline price in the nation at $2.444 per gallon, according to GasBuddy.com, that increase will translate to a price of about $3.20 per gallon by January. Everywhere else, prices should soar higher.
In Los Angeles, for instance, prices are already as high as $3.37 per gallon. If the predictions pan out, consumers in Southern California should expect to pay as much as $4.41 or higher.