Nevermind $4/gallon, are you ready for $7?
We just finished telling you that some analysts say gas prices have peaked, and now this: the AP reports, "Oil futures blasted to a new record near $123 a barrel Tuesday, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages. Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks." Driving the rise? "A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years."
The U.K.'s Money High Street claims that the Goldman Sachs analyst in question, Argun Murti, has "a track record of successfully predicting future oil prices."
For perspective, another AP report tells us that oil sold for "about $62 a barrel a year ago," and a gallon of gas sold for $2.85.
Andy Lipow, president of the consulting firm Lipow Oil Associates, told Newsday that "Even an increase to $150 would increase gasoline prices by another 75 cents a gallon."
Kentucky's WKYX says, "Using a rule of thumb that a $1 increase in crude means an additional 5 cents a gallon at the gas pump, the retail price of gasoline could easily top $5 a gallon and might even hit $7" if crude prices hit $200.
Ohio CBS affiliate ONN-TV makes the same claim, saying "If oil prices rise to $200 like some analysts believe [they] could, gas prices would reach about $7 per gallon."
We've reported the results of several surveys showing that many people would look to purchase a more fuel-efficient vehicle if gas hit about $4 per gallon. We've also reported that, some places, it already has.
What would you do at $7 a gallon? Beyond just looking for outdated fuel pumps that can't charge that much, would you buy a hybrid? A scooter? An apartment near your office?