How Expensive Does Gas Need To Get?

Gasoline prices are, nominally, likely to keep increasing. But in real terms, the price of Gasoline would need to go up past $3/gallon (US) for prices to match the heights of the oil shock days. Assuming a direct correlation between oil and gasoline prices, that means something like $75-$80 per barrel. So we're not there yet.

Why does this matter? Because at least one analyst suggests the price of oil would now have to rise to $150 per barrel for serious rationing to set in. I think the math on that estimate is roughly along these lines: in real terms, the price of oil during the oil shocks was $80, and we now use half the oil we used back then per $1 of GDP. But I think that kind of math ignores the fact that certain sectors of oil usage are as bad and inefficient today as they were back in the bad old days - auto fuel efficiency, for example. I think we'll see people selling their SUVs long before oil hits $150. If they can find any buyers, that is.

And in more Oil Peak news, yet another Wall Street analyst has come out with an estimate of when we'll hit the wall. This time, the estimate is broken down by major company. Short story - 2008 is gonna suck hard. According to John S. Herold Inc, that's when Exxon, ConocoPhillips, BP, and RoyalDutch/Shell will all hit their peaks. Read the whole story here at Salon - you'll need to skip through their ads to do it.