Watch out: Here comes $4 gasoline

CNN reports “Gasoline prices, already above $3 a gallon in some states, could charge higher this summer and hit $4 a gallon in some locations, according to one industry expert.

Pump prices were supposed to peak below $3 a gallon this May, then drop off before the summer driving season got into full swing, according to the Energy Department’s price forecast.

Well, we’re not even out of April yet, and the nationwide average price for a gallon of unleaded regular has hit $2.87.

One big factor driving prices: gasoline inventories continue to fall. After a promising one-week boost in refining activity, the latest report Wednesday actually shows refining activity falling. And demand is already soaring, before the summer driving season is in full swing.

What this means for prices is obvious, and to most drivers it is not good news…”

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While this is all fascinating and shit, its important to remember that many of us have been talking about the coming housing slump, inflation, dollar depreciation, and rise in oil/gasoline prices for a couple of years now. Its not going away, folks.

Its real.

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I encourage you to read this Michael Ventura essay on $4 Gasoline from April of 2005:

“Gas prices can only go up. Oil production is at or near peak capacity. The U.S. must compete for oil with China, the fastest-growing colossus in history. But the U.S. also must borrow $2 billion a day to remain solvent, nearly half of that from China and her neighbors, while they supply most of our manufacturing (“Benson’s Economic and Market Trends,” quoted in Asia Times Online) – so we have no cards to play with China, even militarily. (You can’t war with the bankers who finance your army and the factories that supply your stores.) China now determines oil demand, and the U.S. has no long-term way to influence prices. That means $4 a gallon by next spring, and rising – $5, then $6, probably $10 by 2010 or thereabouts. Their economy can afford it; ours can’t. We may hobble along with more or less the same way of life for the next dollar or so of hikes, but at around $4 America changes. Drastically.”