$200 Oil and $6 Gas Just Months Away

We can argue about whether high oil is a bubble or not and who the villians are, but $200 oil is now a real possibility.

WSJ: Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year.

Oil at that price would wreak deeper havoc on the world's airlines and automobile industries.

In the U.S., $200 crude would push the price of gasoline to well over $6 a gallon, causing commuters to alter their driving habits more sharply than they have already, while putting extreme strains on large sectors of the U.S. economy.

The good news, such as it is, is that such theories no longer seem crazy. And the more that talk of an "oil bubble" is replaced by a sullen consensus that prices are headed straight to the moon, the more likely it is we'll get a major correction. Unfortunately, the main catalyst for this drop will likely be global economic collapse.

Mid July, Gas/Fuel Rationing?

Words on the farm, on the street...

A friend stopped by this morning, on his way home from town. He had just filled up a 200 gallon tank with farm diesel at $4.35, up a dime from last week. He said the distributor told him that starting on July 17, they would be allotting fuel to the distributors, & the amount he receives could be cut by up to 50% of what he normally buys.

My dad owned a gas station in the 1970s, so I remember how he could never get enough gasoline from his distributor to last between deliveries. The distributor was only allowed to sell him so much at a time, and it was never as much as he needed. He would limit the amount that his customers could buy to 5 or 10 (can't remember exactly) gallons per purchase to try to make it last longer. Most stations would be out of gas for half the week or so, and the ones that did have gas would have long lines waiting to get some.

GM, Ford, Toyota Plunge as BUYERS REJECT BIG

July 1 (Bloomberg) -- General Motors Corp., Toyota Motor Corp. and Ford Motor Co., the biggest auto retailers in the U.S., said June sales plunged as fuel prices above $4 a gallon drove consumers away from gas-guzzling trucks.