Gas to Remain Above $2.50 Throughout ’08

Near record oil prices highlighted the energy picture for 2007. Next year, consumers will face oil prices that, while not as high as in 2007, will still be higher than they should be, says a University of Alabama engineering professor.

“There is no recovery in sight for the value of the dollar against other currencies, and this alone will ensure that oil prices stay high,” says Dr. Peter Clark, associate professor of chemical and biological engineering at UA. “When this is coupled with instability in many of the more prominent oil producing regions, there is not much hope for a large drop in the price of oil. Increased demand in China and India will continue to put pressure on supplies.”

Clark also predicts when supply shortfalls would occur. As has been the case for the last several years, gasoline prices will rise in the spring because of supply shortfalls. These shortfalls are a result of refinery shutdowns for annual maintenance coupled with an increase in demand. In the absence of any upheavals in oil producing regions that result in supply disruptions, gasoline prices should begin to moderate in the late spring.

“Do not expect the price to drop below $2.50 per gallon for regular,” says Clark.

“In the short run, conservation efforts are the only thing that will moderate the price of oil, and therefore the price of gasoline, to any great extent. If consumers would drop their gasoline usage by 5 percent, the price of gasoline would drop significantly,” says Clark.