High gas prices: Recession-proof

Americans may see falling stock markets and employment rates, but worldwide demand and OPEC should keep the heat on oil and gas prices.

NEW YORK (CNNMoney.com) — Contrary to popular belief, Americans facing a looming recession should expect little relief in the form of lower gas prices, experts say.

Despite recently falling oil and gasoline prices, strong worldwide demand, refinery shortages, and OPEC production cuts should keep gasoline well above $2 a gallon in 2008.


Slower consumer spending and rising unemployment – traditional harbingers of an economic downturn – are unlikely to drastically reduce energy prices. Oil isn’t expected to fall below $60 a barrel from its current level of $90 and gasoline should bottom out around $2.30-2.50 a gallon from around $3 currently, experts say.

“That’s the floor, even in a global recession,” said Simon Wardell, an oil analyst at consulting group Global Insight. “The overall balance is going to remain pretty tight.”

In the short run, gasoline prices might slip a bit but long-term both gas and oil prices are expected to remain near record highs.

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