$5 a gallon gas? Say it ain't so!

This was all over the news yesterday. Hardly a word about $4, it could be $5 in a year and I can't imagine the problems this will cause.
I'm very fortunate I live within walking distance of a supermarket, dollar store, Target. But I also know a lot of people aren't so lucky and rely on their automobiles much more. Will they alter their driving and adjust? It seems so strange while so many things we use have evolved over time, cars ran on gasoline 100 years ago...and they still do.

Tim

$4 gasoline was not an anomally and nothing has been done to prevent financial instituions from hoarding the oil contracts like they did before the crash. Get ready for Act II.

But.......
Driving a hybrid car at $5/gallon is the same as driving an SUV at $2/gallon.
Driving a Ford Focus at $4/gallon is the same as driving a Ford Explorer at $2/gallon.
As much as I loved my old pickup truck I dont miss the frequent and expensive visits to the gas station. I'm prepared this time.

Interesting to see what happens if gas hits $5.00. Big repercussions for sure. Gas could be $1.50 but that entails certain changes in national and legislative priorities.
As far as the contracts pj refers to. Oil is very expensive to get in the few places allowed in the US due to regulations and environmental lobbies. Foreign oil is more interesting. Arab oil funds the madrassas. As for African oil contracts, guesss who is buying them up like hotcakes? China. South American? China. Remember "no blood for oil?" Iraq contracts are going to...China. China is off our own Gulf coast and is also building 100's of new coal plants.
Yes, $5.00 a gallon may indeed cause some re-evaluation of our priorities.

Bush is the reason dam him..

PJ do the 18 wheelers who deliver your milk bread peppers eggs drive hybrids?

Crash 2 is coming right along with 4 dollar gas...

Been saying since 04 BUY GOLD!!!!!!!!

Actually 18 wheelers driving on natural gas is part of the energy plan being proposed by some of the more thoughtful people in Washington. The unthoughtful ones have bigger priorities - like getting to the bottom of Obama's birth certificate.

And thanks for once again demonstrating that tricke down economics doesn't create jobs, it just helps fat-cats like you hoard gold your Apocolypse bunker.

The lefties were all over President Bush when gas was $4. If it goes to $5 will they be all over President Obama? I doubt it because since the left wing women's groups are all over any man who insults a woman not named Sarah Palin the lefties would certainly not blame their golden boy. I have had my say so I will close with the opinion that we will not see $5 gas because people will stop all unnecessary driving and will stop buying SUVs so demand will drop the price (I hope).

A couple of quick observations: $5 a gallon is possible. But I would suggest looking up the record of anyone who makes forecasts on gas prices. You'll find no one has a good record more than a few months out, other than a slow increase in price and typical seasonal flucuations.

Second, I don't the futures contract argument. There are several problems with this. First, I'd like to see data on the size of holdings (in market share) by organization. I suspect no one holds a large share. Second, even if one corners a futures market, one does not corner the spot commodity market. To corner the spot commodity market, one will need to take delivery of the commodities. Where will these financial institutions put all the oil they're cornering? Finally, typically, to drive the price of a good up, you have to reduce supply. Buying up more contracts doesn't reduce the supply -- it increases demand which increases the amount of oil, though may temporarily raise price, will later cause it to fall as they attempt to dump the excess supply.

Finally, how many years did we rely on horses?

So, why did we stop drilling in the Gulf when China is expanding its drilling < 100 miles away?

And why can't we drill in Anwar?

Urban legend.

Because it's a National Wildlife Refuge (that's the "NWR" in "ANWR"), and we don't drill in those federal lands we've designated as National Wildlife Refuges.