Citizen Power

Our wallets had it good for awhile, but gas prices are going to rise fast in 2009. Happy New Year!

In December, Civilianism’s podcast reported on the UAE–CNN “Goldilocks Oil” story that said OPEC is prepared to raise oil prices in order to maximize their profits, in response to lowering world oil prices. This is to make up for the fact that people are using less oil and gas. OPEC oil prices will again be manipulated to go up enough to keep their profits stable, so our oil and gas prices are once again going to rise.

Iranian Press reported “Iran says it will cut oil output by 545,000 barrels per day (bpd) from Jan.1 in line with OPEC’s December decision to reduce supplies…. The Organization of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s crude, agreed in a December summit to cut output by a record 2.2 million bpd to prevent the downward spiral of oil prices.”

“Oil markets are expecting a tough year in 2009 as the global financial crisis is expected to sharply slash demand for oil. According to a Reuters poll, US crude will be traded with an average price of $49 a barrel in the first quarter of 2009 and $58.48 a barrel for the whole year, $14 less than earlier forecasts.”

I don’t believe the prices will stabilize anywhere near $60 a barrel. The CNN story (excerpt below) clearly states that OPEC is planning for around $75 per barrel, and that’s before the probable world response of diminishing need and use for oil in the future. When that happens, the price will go up even more. And because of climate change, we can’t use more fossil fuels, especially with a new Obama administration, because he has said he will fight climate change. Climate change is not fought by burning fossil fuels, it’s fought by replacing fossil fuel use with other types of energy. That will further lower the demand for what OPEC is selling.

(more…)