Big New Shock at
the Pump Forecast by Two Analysts


By DAN
DORFMAN, Special to the Sun | April 28,
2008



In Manhattan, at a Mobil gas station at York Avenue and East
61st Street, premium gas is now $4.03 a gallon. Two days ago, it was $3.96. Why
such a high price? �Blame the people at STOPEC (he meant OPEC) and the oil companies,� an
attendant there told me.


These increases are
taking place before the all-important summer driving season, signaling even
higher prices ahead.


That�s also
the outlook of the Automobile Association of
America. �As long
as the price of crude oil stays above $100 a barrel, drivers will be forced to
pay more and more at the gas pump,� a AAA spokesman, Troy Green, said.



Canadians
are also being hit with rising gas prices. They are paying the American-dollar
equivalent of $4.92 a gallon, and they�re being told to brace themselves for
prices above $5.65 a gallon this summer.


Early last
year, with a barrel of oil trading in the low $50s and gasoline nationally
selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines � in an impressive
display of crystal ball gazing � accurately predicted oil was $100-bound and
that gasoline would follow suit by reaching $4 a gallon.


His latest
prediction of $200 oil is open to question, since it would undoubtedly create
considerable global economic distress. Further, just about every energy expert I
talk to cautions me to expect a sizable pullback in oil prices, maybe to between
$50 and $70 a barrel, especially if there�s a global economic
slowdown.


While Mr.
Gaines thinks there could be a temporary decline in the oil price, he�s
convinced an overall uptrend is unstoppable. In fact, he thinks his $200
forecast could be conservative, and that perhaps $250 could be reached. His
reasoning: a combination of shrinking supply and increasing demand, especially
from China, India, and America.


Mr.
Brodrick�s $200 oil forecast is largely predicated on a combination of pretty
flat supply and rip-roaring demand. Other key catalysts include surging demand
in China and India, where auto sales are booming, and major supply disruptions
in Nigeria and also in Mexico, our second-largest source of oil
imports, where oil production has fallen off a cliff.


More factors
include the ever-present danger of additional supply disruptions from volatile
countries in the Middle East that are not our allies, and the
unwillingness of SUV-loving Americans to trim their unquenchable thirst for
foreign oil. Likewise, for the first time, emerging markets this year will use
more oil than America.


To Mr.
Brodrick, it all adds up to an ongoing energy bull market. His favorite plays
are the Energy Select Sector SPDR
Fund ; United States Natural Gas Fund
LP; Apache Corp.; Occidental Petroleum; Anadarko Petroleum, and Schlumberger.