Will Gas Prices Be Higher in 2008?

With the current weak value of the dollar globally, and trouble in the Holy Land, another factor to consider for the U.S. economy is the price of gas for 2008. Will gas prices be higher in 2008 ? At first glance, a direct and unabashed answer is; " Yes. " The buying power of the dollar is on a continued slide in very important markets. If this does not change, will the United States be caught in a literal "power crunch"? Let's take a reasonable look at the projected prices of gas for 2008, as it relates to the buying power of the US dollar.

The department of energy has given a report this week on the estimated usage and prices of energy, oil and gas included. They estimate a modest gain in the price of gasoline for the early part of 2008. While historically , as everyone in the United States knows, the price of gas has always risen, this trend will no doubt continue. The price of a gallon of gas will average more than three dollars a gallon by May 2008 according to the U.S. Department of Energy. The Winter temperatures will play a part in the total consumption of gas among U.S. users. The Winter of 2008 is projected to be a little colder than 2007. The estimated lower temperatures will bring about an increased use of heating oils, natural gas, and so on. This will drive gas prices higher.

Some are disagreeing with the Department of Energy's estimates. It is always nice to have a second opinion on things. The owners of the oil wells in the Arab countries are apparently in a shopping spree. Will this have an effect on the price of gas in in 2008 ? It is interesting to see just what the rich oil producers are buying. One example is the London Stock Exchange. The "emirate of Qatar" bought twenty per cent of the London Stock Exchange. If controlling the oil was not enough, they also seem to be targeting whole economies. What will help to stabilize this is the projected downturn in demand of oil from the United States. This downturn will not be anything to write home about. It will only keep people from getting a crippling hit in the wallet all at once. The inevitable rise in gas prices will no doubt return.

Pessimism reigns supreme over some estimates that the price of a barrel of crude will be one hundred dollars. Goldman Sachs, a leading banking and investing firm has predicted this ominous and obvious hit on the US economy. Some think the price of gas goes higher because of the war in Iraq, but this is not a tried-and-true fact. Saudi Arabia is able to increase its production to cover the lack of production happening in Iraq. Iraq is currently experiencing a governmental inability to keep things under control. To say it another way, if Iraq oil production goes down, it can be replaced on the world market by Saudi Arabia.

Gas prices were at $30 dollars a barrel in 2003. Currently, oil is trading at $80 dollars a barrel. 2008 should prove to be a make-or-break year for the value of the dollar, and its resulting power ( or lack of power ) to buy gas from foreign nations. Cold winter or warm, gas prices are headed higher through a weakened dollar combined with current events, unless something drastic and positive happens to the United States.