Here's a lovely headline: "Oil jumps above $40. . ." Been wondrin' when that was going to happen.
There had already been reports on OPEC decisions to reduce production. Then enter the Gaza attacks. And why would that affect oil prices? Fear that any conflict in the good old Middle East will hinder supply, says one analyst, though same analyst also says he doubts it actually will be disrupted. It's just that any conflict in that area can "support" higher prices, at least short term. Uhuh.
Russia's Prime Minister Putin warned at a GECF (Gas Exporting Conference Forum) meeting that the explorations for oil are now having to go out into more and more remote areas and making extraction more expensive. Okay. Sounds like the stuff is getting harder and harder to find by the largest exporter of gas in the world. If some people need more convincing that alternative fuel sourcing must be set in motion immediately, wouldn't this qualify?
The increase at the gas pumps may not occur until February. I haven't seen estimates for how much that will rise. Guess it's hard to say. I suppose we should go ahead and lighten up on our gas pedals now though.
On the other hand, the bigger picture shows that oil demand in the USA and other countries is decreasing. A report prepared for a London summit of energy suppliers, called by Gordon Brown earlier this December, says that demand in the USA likely peaked in 2007. The 2008 numbers are expected to show a 1 barrel per day decrease from 2007 numbers. Other industrial countries show similar expectations.
Lower demand, lower supply, disruption in the Middle East, plus other factors unknown. What will the equation yield at the pump, short and long term? Maybe it partially will be determined by how much and how sharply the demand is actually lowered. That is the part of the equation we can have the most impact on.