Unrest in Libya prompts flurry of forecasting about gas and oil prices
When it comes to the impact of the turmoil in Libya on global oil and gas prices, analysts seem to agree on at least one thing: prices will be driven up. But beyond that, there seems to be little consensus as to exactly how big the increases will be and how long they will last.
With oil prices at a two-year high, here's a roundup of some of the chatter on the Web and in the news on this topic. Tell us in the comments section where you think prices are headed and what you're seeing at gas pumps in your neighborhood.
Analysts interviewed by USA Today had a grim forecast for drivers:
"If this thing escalates and there's a good chance that there'd be a shift in supplies, $5 gas isn't out of the question," says Darin Newsom, senior analyst at energy tracker DTN.
Another energy expert quoted in the same story cites a host of economic factors that, along with the violence in Libya, could lift gas prices:
"If you are looking at the disruption of movement and production in countries such as Saudi Arabia and the UAE, you're easily talking $5 gas," says Peter Beutel, president of energy adviser Cameron Hanover. "We have all the wrong things working together at the right time: an economic recovery, (stocks) making new highs, a lower dollar, strong seasonal demand and unrest in the heart of oil production."
That would mark a sharp uptick from today's average gas price, which AAA says is $3.194 per gallon.
In an appearance on NPR yesterday, Amy Myers Jaffe, director of energy research at Rice University, offered a more conservative prediction:
"My opinion is if we're watching unrest in the Middle East still in May, that we're - I think we're very likely to see, you know, $4 gasoline price."
An academic interviewed by the Associated Press says that prices will swing rapidly between gains and losses:
"Today's situation is reminiscent of the 1970s," said Anthony Michael Sabino, a professor at St. John's University's college of business. "The price of oil will now jump in direct relation to one of its oldest barometers - political tension in the Middle East."
"Expect nothing but a roller coaster ride for a few weeks, if not months."
Bloomberg News reports that Japanese bank Nomura outlines a scenario in which crude oil could reach an eye-popping $220 per barrel:
"If Libya and Algeria were to halt oil production together, prices could peak above $220 a barrel and OPEC spare capacity will be reduced to 2.1 million barrels a day, similar to levels seen during the Gulf war and when prices hit $147 in 2008," the Tokyo-based bank said in a note today.
This forecast, however, seems like a bit of an outlier in comparison to other analyses.
| February 23, 2011; 12:54 PM ET
Save & Share: Previous: Oil prices surge as violence in Libya escalates
Next: Facebook exec, venture capitalist, union leaders among those named to Obama's jobs council
Posted by: jsoule | February 23, 2011 2:51 PM | Report abuse
Posted by: jsoule | February 23, 2011 2:52 PM | Report abuse
Posted by: Anonymous | February 23, 2011 5:08 PM | Report abuse