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Oil and the price at the pump

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Energy analysts say a glut of oil means gas prices probably won't spike too much this year. Rebecca Williams has more.

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We're paying anywhere from 70 cents to a dollar more per gallon than this time a year ago. The good news is, we're not likely to see four dollar-a-gallon gas anytime soon.

"We're not in a world with runaway oil prices."

That's Ruchir Kadakia. He's a global oil market expert with IHS Cambridge Energy Research Associates. He says weak global demand is keeping oil prices in check for now. At the same time, supply is relatively high. He predicts oil won't average much higher than 80 dollars a barrel for the next year or so.

"And so what that really means for the gasoline point is through probably 2011, we shouldn't expect to see gasoline prices much above three dollars unless it's for a short period of time maybe in the summertime for a few months."

Kadakia says oil speculators can drive prices higher or lower in the short term. But he doesn't think we'll see any major price spikes over the long term.

For The Environment Report, I'm Rebecca Williams.

Copyright 2010. The Regents of the University Of Michigan. Used with permission.

 

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