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$4 Gasoline by May 2016

$4 Gasoline by May 2016.

Excess inventories are keeping gas prices low but Peak Fracking Oil in July 2016 will deplete that inventory within 200 days. Gasoline prices will rise sharply.

EIA's "This Week in Petroleum" crude oil report show a 474,000 barrel per day decrease in US oil production since July 2016.


There are two possible explanations:

  • Producers are not pumping because of the low oil price.
  • Producers cannot pump because Peak Oil from fracking has passed.

If the second case is true, and I believe it is, then in about 200 days, the current "excess" inventories will be depleted back to the 5-year average and the price of oil and gasoline will be much higher.


By May 2016 I expect gasoline prices to be back in the $4 per gallon range. Gasoline prices tend to ratchet higher. Since US Peak Oil in 1970 there are two long-term trends in gasoline prices. The overall average is about 7.3% per year increase. Since China and India started importing major amounts of oil in 1998, gasoline prices have averaged 14.1% per year. The peak in oil production in July 2016 indicates that the next ratchet higher in gasoline prices should be expected by May.


If the rate of fracking decline continues, then the EIA forecast for future US Oil Production has a gigantic hole in it. EIA should immediately identify the reasons for these declines and consequences for the American people.


Life requires energy. Less affordable energy, less life.




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