Everyone has a breaking point. Some people went full RedBox when movie tickets hit $10.50, others swore off coffee when the price rose above $5 a cup.
But with the continued unrest in Libya and the upheaval all over the Middle East, oil prices are on the rise again and experts are warning that Americans may start paying dearly at the pump. How dearly? If you thought the nearly $4/gallon of gas from 2008 was a drag, The Huffington Post reports that those days may soon feel like a picnic.
One of Wall Street's most prominent energy analysts, Oppenheimer & Co.'s Fadel Gheit, said this week that people are not fully getting the picture.
"There is no cure for what's going on," he said, explaining that the political upheaval in such oil-producing countries as Saudi Arabia, Kuwait, Oman, the United Arab Emirates, Qatar and Iran could lead to, yes, $7 a gallon gas.
Those six countries produced about 21.2 million barrels of oil a day amounting to 27 percent of global oil supply. If political uprisings continue and lead to likely oil disruptions and higher crude prices, we might see the highest prices we’ve ever seen at the pump.
The domino effect could also jeopardize the fragile economic recovery if currently booming stock prices take a tumble due to fears of cut backs as a result of a gas shock. Until Thursday’s rally, that effect already seemed to be in place, as the Dow Jones stock index slid 322 points in the week’s first three sessions.
Prices for a barrel of oil reached their peak in July 2008 at $147.27, and while they’re now just under $100/barrel, experts say they’re headed to $100-$130.
The average gallon of gas is around $3.17 now, expected to climb to $3.50 by spring and possibly as high as $4.25 a gallon by July 4. And if things go haywire in Saudi Arabia, forget about it, $7 a gallon may be the low end of things.
Will you drive if gas is $7 a gallon?
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