As summertime approaches, so do rising fuel prices. This time around, the price hikes are tied to rising world oil prices. When gas prices dropped from peaks of over $4 per gallon last summer to under $2 at the end of the year, world-wide demand reductions resulting from the financial collapse were to blame. Oil traders now seem to think that the economy will be recovering in the coming months, and have been bidding up prices in recent months. This week prices have $63 per barrel and Saudi Arabian Oil Minister Ali al-Naimi thinks the economy can sustain prices at $75-80 and expects prices to hit that level by the end of the year.

OPEC is expected to hold production steady for now in an attempt to keep prices up. Saudi Arabia wants prices up to fund development of new production, while Venezuela wants higher prices to pay for President Hugo Chavez's aggressive social programs.

With the aggressive new CO2 emissions standards announced by President Obama last week, higher prices will definitely help drive demand for more efficient vehicles. The problem is that if prices are too high before the economy picks up again, the current situation - where no one is buying any vehicles at all - will continue. As for the long-term, a new study predicts that prices will hit $110 per barrel in 2015 and then maybe $200 per barrel in 2030.

[Source: Reuters, Green Car Advisor]

I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.

    • 1 Second Ago
  • 2015 Toyota Highlander
    MSRP: $29,765 - $44,140
    2015 Jeep Grand Cherokee
    MSRP: $29,995 - $64,895
    2015 Honda Accord
    MSRP: $22,105 - $33,630
    2015 Honda Civic
    MSRP: $18,290 - $26,740
    2015 Mazda Mazda3
    MSRP: $16,945 - $25,545
    Share This Photo X