• Jun 11th 2009 at 4:57PM
  • 41

America might get most of its oil from Canada, but the moves that OPEC makes still reverberate here. Thus, a statement by the
Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah to reporters yesterday probably won't help decrease domestic gasoline prices any time soon. OPEC's al-Sabah said that the organization will not consider increasing production until the price of a barrel of oil reaches $100.

Currently, the price is around $70 a barrel – up almost 60% this year – but way, way down compared to the highs of 2008. Oh, and when the $100 price per barrel threshold is reached, only then will OPEC "maybe" consider putting more supply into the market. The organization sees the recent rise in prices as the result of investors looking for good places to put their money, not because demand for the product is rising. Over the middle-to-long term, many expect forecasters expect prices to easily surpass $100 a barrel once again.

[Source: Bloomberg | Image: David McNew/Getty]

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    • 1 Second Ago
      • 6 Years Ago
      I wouldn't be surprised to see gas breach $4.00 a gallon (nationwide average) by Christmas.
        • 6 Years Ago
        I agree with d4rez, here in my part of Canada gas just went over $1 per liter, I don't see why Americans complain about $3 or $3.50 a gallon, it's still cheaper then a lot of places.
        • 6 Years Ago
        There is a certain critical point in which oil cannot increase price without demand crashing to bottom.
        • 6 Years Ago
        I don't think it will happen.

        I would be surprised to see the DJIA hit 14K by Xmas...which is about what it would take to get 4.00/gal regular.

        Their just isn't that much demand and we're still losing, what, 500K jobs per month.
      • 6 Years Ago
      You're welcome for expelling the Iraqi invasion, Kuwait.
        • 6 Years Ago
        We saved their asses, and they stick it in ours. I can't wait untill someone invents a battery for electrics that makes oil/gas irrelevent. Take your turbin and put it where the sun doesn't shine a-hole
      • 6 Years Ago
      When I read that "OPEC won't increase production until prices hit $100/barrel" . . . I say if this isn't a good reason to pursue other sources of powering our vehicles, I don't know what is.

      Of course, oil producers deserve a fair profit (just like any other industry) but to gouge us is not good.
        • 6 Years Ago
        The thing is, when the Saudis INCREASED production quite a bit in the Spring of 2008, the price of oil actually went UP.

        All that talk by Wall St. "analysts" about how the high price of oil (in 2007/2008)was a result of high demand by China and India (and how the price was going to break $200) was pure BS.

        It was just the I-banks' mouthpieces talking up oil as an investment sector so that they could make millions in fees.
      • 6 Years Ago
      Why can we drill here in the US... oops I forgot the EnvoriMENTAL...
        • 6 Years Ago
        "Why can we drill here in the US... oops I forgot the EnvoriMENTAL..."


        Uhh, oil companies have curtailed new drilling, developing new oil fields, etc. b/c the PRICE of oil didn't warrant the investment (it costs a lot more to get a barrel of oil out of the ground in the US than it does in the Gulf states).

        Plus, our oil reserves are nothing compared to what the Gulf states have - even if the present cost enabled the oil companies to drill more, the Gulf states would have simply offset that by cutting production in order to maintain a higher price.

        And once again, the rise in oil has little to do w/ actual supply and demand and is due to speculators pumping $$ into oil futures (thanks again, Phil Gramm, for over-DEREGULATING the commodities market).
        • 6 Years Ago
        Funny how you didn't read the article at all unknown. The oil companies are a monopoly ATM. They basically do not want to compete versus each other and will sell for whatever they can get away with, because they know we will pay. Look at how demand has gone down. They still want prices to go up. How is that like any other business? You think if Sprint is bleeding customers like it is, its going to all of a sudden raise its fees on customers? You think GM is going to charge more for cars when no one wants to buy em? The oil business is like not like normal businesses. They are selling the oxygen to our cars lungs. We need it. Why would they spend more money to flood the market with cheap oil when they can just overprice it and make a killing off of a necessity. We are nothing but pawns in this situation.
        • 6 Years Ago
        Oil is about to become the new diamond market. There may be tons of the stuff sitting around, but if you can't get anybody to sell more then the price goes up and stays up.

        Except its worse since you can deal with a nagging woman not getting a new rock on her finger, but you have to get to work one way or another.
      • 6 Years Ago
      If gas prices went up...it would be the perfect reason to get a newer more efficient car just like the auto industry so desperately needs...you think?...nah definately not on purpose.
      • 6 Years Ago
      This might be good news for the Chevy Volt.
      • 6 Years Ago
      The Kuwaiti oil minister should have been reminded that if we hadn't
      come to their defense in 1991 that Saddam Housain would be running
      their oil industry today!
      • 6 Years Ago
      It's funny to hear many people say that the solution is to drive more fuel efficient cars. The reality is, not all of us can do that. What about the people that live outside of big urban areas? Some of us live in rural areas and don' t have to deal with all the stop and go traffic in a big city which I might add would have to cut the life span of the average person by about ten years. I live in a small town in Georgia and need a larger 3/4 truck to pull my Tractor to support my land My tractor weighs in at twice the weight of a normal car. I am sorry to say that your prius or civic won't suit my needs. We don't all have the same vehicle needs! My point is people are so fast to judge other poeple on their business. I will point out that My duramax diesel gets about 22MPG on the highway when I am not pulling a trailer and makes and awesome family hauler on longer trips with the kids.

      However.......When I don't need to pull a 10,000 load or I am just driving to work alone, I have an additional Nissan Altima that get's 34 MPG. And if I really want to cut my fuel consumption, I just drive one of my motorcycles which gets a minimum of 45MPG.

      None of us can control the price of fuel. It WILL go up and down. Why is everyone so quick to jump in someone elses business? I for one have enough going on in my own life not to worry about what another driver out there is driving. I couldn't possibly care less what someone else chooses to drive.

      If we all just drove what we needed demand for fuel would naturally decrease and keep the overall price of fuel down.
      • 6 Years Ago
      I don't know why I keep trying to read autoblog comments.

      The quality is beginning to descend to YouTube levels.

      And that's bad.
      • 6 Years Ago
      Let's make mexico and canada our 51st and 52nd states , problem solved , they got tons of oil ,
      • 6 Years Ago
      Eff em. Go nuclear power/electric and we'd have all the oil we'd need in North America. Let them go back to living in tents in the desert.
        • 6 Years Ago
        Tiger, interesting suggestion.

        Did you know that as we speak there NOT A SINGLE NUCLEAR plant is USA that is profitable without heavy governmental subsidies.

        It is bizarre that many conservatives say nuclear, nuclear, but never bringup the fact that aside from France nuclear energy is a not for profit entity. Companies do make money, but they require heavy subsidies.

        I will not even bring up the waste issue and who will clean it up……..taxpayer.
        • 6 Years Ago
        Here is an idea. How about lifting the government regulations against drilling for oil in our OWN COUNTRY!?!? This will create less dependence on foreign oil, and drop the price down. Supply and Demand, learned it in Economics class. Also, it will cost less money, and be available sooner. But no, the Eco-mentalists and liberal bureaucrats in Washington say "no, lets spend more money, time, and effort to create a infrastructure that wont be ready until twice as long from now."

        Until then, better get used to our Dear Leader Maobama bowing to King Abdullah for the time being.
        • 6 Years Ago
        How do you fix California's budget?
        PUMP OIL!!!
        Most of Alaska's State revenue comes from taxing the oil coming out of the ground.
        California could stand to make a pretty penny off of some offshore drilling.
        • 6 Years Ago
        Right idea, but wrong time. It doesn't matter what we come up with, but alternative energy is a very very short-term solution. Not because that there is something inherently wrong with alternative energy, but because we don't have a sound currency. All you have to do is look what markets worldwide have been doing for past several weeks.

        1) China yet again expressed its discomfort in buying US debt because they know that the only way they will get paid back is through a devalued dollar. And that's precisely what US is attempting to do. Just read Warren Buffet's 1997 Squanderville article and you'll see what I'm talking about.

        2) Russia has said that it will release some of its US Treasury bond holdings. Again as above, why do you think the rates have went up again? Investors are not willing to loan us more money, hence higher rates, hence weaker dollar.

        3) Investors are no longer comfortable sitting on cash because of coming inflation, they want to put their money into real things. I think they realize that investing money into equities (exception of Chinese) is not smart right now, so they're putting money into commodities. So voila, here's why oil is up over $70.

        No one right now has any confidence in US dollar, US economy or the US government, and of course the Fed.

        So blaming the Kuwaiti for this step is like blaming the thermometer for your high fever.
        • 6 Years Ago
        Urchin...you're right if you consider the unsolved waste problem, which also includes France..the government by definition is heavily subsidizing nuclear power by accepting used fuel and reprocessing it as well as accepting the risks (no insurance company will cover it) associated therewith.

        Arguably, all power generation is heavily subsidized...we accept the increased CO2 generation, toxic gases (and medical cost associated), and the owners/operators walk away with "profits" that do not reflect the true cost of their activity.

        parden moi...we are leaning heavily towards socialism here, but change is in the air! We voted for it and we shall have it.
        • 6 Years Ago
        Nuclear power doesn't make tires, plastics, fertilizer, diesel fuel.... you get the picture.
      • 6 Years Ago
      i'm assuming these are the same forecasters that, 1 month ago, said summer gas prices would not exceed $2.50 / gallon... why do these people have jobs?

      also, one day after the $2.50 prediction, my local prices exceeded it... and haven't been under since. nice.
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