Wed
Jan 2 2008
02:24 pm
Oil hits $100 per barrel
By: R. Neal

AP reports:

Oil prices soared to $100 a barrel Wednesday for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

I used to think the government should tax gas until it was $5 or more per gallon. Now I think they should subsidize it until it's only ten cents a gallon. The sooner we burn it all up, the sooner we will have to find better alternatives.

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Brian A.'s picture

The sooner we burn it all

Submitted by Brian A. on Wed, 2008/01/02 - 2:37pm.

The sooner we burn it all up, the sooner we will have to find better alternatives.

Not a good plan, as there are a number of applications for which we don't have alternatives.

But you are right about subsidies. Exporting countries such as Russia and Saudi Arabia (with low oil prices) are seeing their domestic consumption increase rapidly, which will mean less oil for us--leading to oil prices going well beyond $100.

Brian A.
I'd rather be cycling.

Elrod's picture

Recession will do the trick

Submitted by Elrod on Thu, 2008/01/03 - 1:32am.

I think recession in 2008 is more likely to pull down oil consumption (and and oil prices) than any commitment to alternative energy.

gonzone's picture

One Way

Submitted by gonzone on Thu, 2008/01/03 - 12:01pm.

Oil prices have but one way to go, up.

Unless there's a major worldwide recession, China's growth will keep the demand going up until it's gone.

KC's picture

According to the BBC, one

Submitted by KC on Thu, 2008/01/03 - 1:06pm.

According to the BBC, one trader caused the oil to go up to $100. He bought 1,000 barrels on the New York Mercantile Exchange market at $100 and then immediately sold them for $99.40, and lost $600.

That said, oil will probably go over $100 and stay there in 2008, unless it warms up quite a bit for the remainder of the winter.

The real problem is that if we go into a recession the government will want to cut interest rates. But when high oil prices lead to more inflation, cutting interest rates will increase inflation, leading to a very tricky economic situation that will be dificult to resolve.

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