Why are gasoline prices so high?
Source: US Department of Energy
Even before the storm, gasoline and diesel prices were high as a result of tight crude oil supplies and increased global demand for transportation fuels.
•OPEC production decisions will continue to influence the oil market situation.
•Low surplus production capacity of 2 to 3 million barrels per day, concentrated in Saudi Arabia, weakens the market’s ability to respond to supply disruptions.
•Oil prices likely to remain high at least through 2009. •Many uncertainties could alter the outlook and create volatility in global oil markets.
Why are Prices Getting So High?
•Production increases are expected in both OPEC and non-OPEC countries –Nigeria, Angola, and Saudi Arabia –Azerbaijan, Brazil, Kazakhstan, and U.S. Gulf of Mexico
•The high oil price environment of the past several years has provided sufficient incentives to spur increased growth in unconventional supplies
–Canadian oil sands- Won’t happen at realistic prices. $75 a barrel just pre profit..
–Brazilian and U.S. biofuels
•Significant projected growth in global natural gas liquids
HOWEVER HERE ARE ALL THE THINGS THAT CAN SCREW UP THE ANALYSIS SHOWN!!