Don’t just blame Big Oil — there’s more to it

“The bottom line is that we are growing population, both in the U.S. and the world, our demand for a limited resource is increasing beyond our supply, and price is going up,” said Yiorgo Aretos, founder of TheTMPGroup.

U.S. demand for gas is at its highest level in history, oil companies are having difficulty keeping up with supply to meet that demand and new drivers are hitting the roads and staying on them longer — so “demand is growing incrementally,” he said.
Given all that, he calls for the possibility of $5-per-gallon gasoline by the end of the year — arguably a doomsday scenario.

“It’s possible for prices to hit the $5 range, because there is not going to be any great change in what is currently happening right now, yet supply will continue to diminish and demand will continue to rise,” said Aretos.

Added to that, longer-term down the road, crude supplies will tighten with violence in Nigeria an ongoing problem, and supplies from Iraq, Iran, Venezuela and Mexico are questionable, said Kevin Kerr, editor of Global Resources Trader, a newsletter of MarketWatch, the publisher of this report.

He doesn’t expect the nation’s driving habits to change until gasoline is around $8 a gallon. That’s the level he expects people to be forced to consider options and lifestyle changes.

“It’s coming. It’s just a matter of how soon,” Kerr said.

MarketWatch