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Summer 2008 Gas Prices 1.50/litre
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100 oil is great for some provincial economies, but fact is, pricey crude means you pay more at he pump. This summer, when demand will skyrocket, expect the real possiblity of seeing gas prices in the neighborhood of about $1.50 litre. CIBC World Markets predicts that surging demand in developing economies combined with accelerated depletion of existing supply and widespread delays in getting new oil fields up and running will see the global supply of oil fall as much
as eight million barrels a day below U.S. Department of Energy and International Energy Agency estimates by 2012.
Supply is also not expected to meet expectations in 2008. Couple this with growing world appetite for crude and dwindling conventional well heads, the strain will be expected and a new reality.
With nothing slated to curtail soaring demand in most oil-producing nations means they will not be able to add any additional exports to meet the surging demand in developing countries. Since crude demand in countries like China and India is far more income-elastic than price-elastic, these countries are likely to outbid OECD markets for increasingly scarce global supply.
The OECD is much more price sensitive and oil consumption, which has already fallen over the last two years, will decline by almost four million barrels per day over the next five years in response to steadily rising prices.
What are your thoughts of 1.50/litre gas prices? How will that impact you? Will you even notice?
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Jan 10, 2008, 6:04 PM
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