Another MSM propaganda piece designed to calm the ignorant masses. The article admits that gas prices paid by Americans were the highest in history in 2012. This was after the previous highest price ever paid in 2011. But don’t you worry. They predict prices will be lower in 2013. The author shoots himself in the foot with his own facts. Fuel consumption fell again by 3.6% over last year and is now at 1996 levels. The miracle of shale oil has increased U.S. domestic production for the first time since 1993. If demand is declining and supply is increasing, why did we pay the highest gas price in history? Considering these are the same facts he uses to predict a price drop in 2013, something seems to be missing.
The MSM nitwit blames the high price on global tensions and severe weather. Does he really think tensions in the Middle East will be easing in 2013? Does he really think the drought and hurricanes will disappear in 2013? Did he ever stop to ponder that worldwide oil demand continued to rise in 2012 and will go higher in 2013? Does he really think the miracle of shale oil will continue if the price of oil drops? Kunstler’s chart shows the temporary spike in supply when the Alaskan pipeline opened. Did it last? How long will the shale oil blip last? Oil wells deplete and the only way to increase production is to discover and pump more than you lose from depleting wells. The North Dakota shale oil will not offset the depleting wells for longer than a few years.
If I was a betting man, I’d put my money on 2013 setting a new record for gas prices.
U.S. OIL PRODUCTION
U.S. Gasoline at Pump Averaged Record High in 2012, AAA Says
Motorists in the U.S. paid record high prices for gasoline in 2012, as severe weather and political tensions drove up the cost of fuel.
The national average price of gasoline in 2012 was $3.60 a gallon, nine cents more than the previous annual record set last year, said Heathrow, Florida-based AAA, the nation’s largest motoring group.
Prices touched $3.94 a gallon on April 5 and 6 after crude oil rallied as the U.S. and European nations imposed an embargo on Iranian oil exports to pressure the Persian Gulf nation over its nuclear program. Prices sank as low as $3.22 a gallon on Dec. 20 amid lower demand and higher supply in winter, when motor fuel faces looser emissions regulations.
“Factors as volatile as major hurricanes, refinery outages and tension in the Middle East resulted in significant frustration for people filling up their cars,” Avery Ash, a spokesman for AAA, said in an e-mailed statement.
Gasoline prices will probably drop next year than in 2012 because of increased domestic crude production and lower motor-fuel demand, Ash said.
The U.S. produced 6.98 million barrels of oil a day in the week ended Dec. 21, the most since March 1993, according to Energy Department data. Drillers in states like North Dakota andTexas have spurred the output growth with increased use of methods such as directional drilling and hydraulic fracturing.
The four-week average for gasoline demand the week ended Dec. 21 was 3.3 percent below a year earlier, MasterCard Inc. (MA)said last week. Year-to-date fuel consumption is 3.6 percent below the same period in 2011. The information is based on credit-card swipes and cash and check payments at about 140,000 U.S. gasoline stations.
If U.S. legislators fail to reach a budget deal, the economy could fall into a recession, further depressing price forecasts for next year, Ash said.
Senate Majority Leader Harry Reid said negotiators could reach a U.S. budget deal today that would protect all but top earners from a tax increase at midnight.
The biggest sticking point in the final hours before the deadline is how to cancel or delay more than $600 billion in automatic spending cuts to defense and domestic programs, said two congressional aides familiar with the talks. Lawmakers also were narrowing the annual income level at which tax rates would increase in 2013 to between $400,000 and $500,000.
“What happens with gas prices this year will be impacted by decisions in Washington this month,” Ash said. “Yet no matter what happens in Congress, AAA is optimistic that gas prices will be less expensive than in 2012.”