The Escalating Rise in Gas Prices

The Associated Press says that many US energy officials are predicting that an increasingly slower growth rate may be on the table for the worldwide demand for oil and refined products.

Experts are saying that the decelerated rate will begin in 2015 and that oil’s share of total world energy consumption will decline to 33 percent only 15 years later.

The bold prediction is a significant one for those with their financial interests deeply rooted in companies that rely heavily on international prices and worldwide consumption of oil.

Nearly a year ago, an article featured in businessweek.com spoke about the increasingly detrimental effects that rising oil prices have had on the automobile industry here in the United States. After the astronomically high increases in the summer of 2005, many domestic car companies were forced to downgrade their product lines, causing SUV sales during the first six months of 2006 to drop by 13.9 percent, thus resulting in a 2.4 percent increase in the sale of passenger cars.

With the ominous $100/barrel price tag threat no longer hanging over our shoulders, the door to investing in companies such as car manufacturers may once again be opening.

With the price of GM’s stock dancing between $18 and $50 over the past three years and Ford’s recent price history just as volatile, the news of a slower growth rate for the worldwide demand of crude oil could mean a steadier market for investors.

The predicted steady rise could also result in opportunities for those who benefit indirectly from the success of companies and corporations who rely on the steady price of oil in order to keep their businesses afloat.

The report is based on the fact that current energy policies and regulations will remain as they are and that the demand for alternate sources of energy (oil, natural gas, coal, nuclear and renewables) will rise by 57 percent over the next 25 years. Furthermore, the prediction also relies on the assumption that coal's share of world energy demand will rise to 28 percent, up from 26 percent in 2004 - rising faster than any other energy source, at 2.2 percent annually.

Today, the international community consumes an estimated 85 million barrels of oil a day. By 2030, that number is expected to rise to 118 million, with the US, China and India accounting for nearly half of the growth.

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