Oil has been on a rampage lately, only breaking its 20 day win streak a day or two ago. After we have seen oil skyrocket, we have also seen our prices go up at the pump which is putting the squeeze on consumers. The national average continues its ruthless quest for $4/gallon and some analysts are forecasting gas prices to hit $5-6 a gallon this summer. However, despite what the national average says, Californians could be seeing gas prices soar past 2008 highs.
In the US, the national average was up 15 cents in a week and 30 cents in a month to where it currently stands around $3.72 a gallon. That is only 40 cents away from 2008 highs for the national average. That is considerably bad and a high gas price. However, as a citizen living in California, we wish we could pay the national average. The 2008 high for gas prices in California came in at a ridiculous $4.61 a gallon. However, prices have jumped 14% in the last month to where it now sits at $4.34 a gallon. The current price is only about 6% lower than the highest prices California has ever seen. That is not good at all.
Unfortunately, there is not much we can do. Until the price of oil falls we will be paying big money just to fuel our cars. The US government has not indicated a desire to tap emergency oil reserves to help bring down the cost of oil but they may want to start thinking about it. There is nothing worse to a fragile recovery than soaring oil prices. Higher oil prices mean a bigger chunk out of consumers. Businesses that rely on consumer spending will most likely be taking a profit hit this quarter and more quarters to come if we can not find a way to calm down the oil markets.
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If you follow my writing, you would know that I am a huge supporter of natural gas which we have in abundance right here underneath us. I’ve said this before and I will say it again, natural gas would make us energy dependent for over 100 years, create more jobs and prices would be cheaper. The problem with natural gas is there aren’t a whole lot of cars that run on natural gas. That is why the government should provide tax and other incentives to help grow demand for natural gas powered vehicles. Until that day, we will continue to pay the Middle East astronomical prices for their oil.