How Long Will We Enjoy Low Gas Prices? [VIDEO-POLL]
John Hofmeister says the low prices will end sooner than motorist think.
Who is this John Hofmeister and why should you care? The former president of Shell oil is once again predicting $5 a gallon gas could be in our future. Back in 2010, Hofmeister garnered attention when he forecast gas prices would climb to $5 a gallon in 2012.The price fell short of the prediction, however the $4 mark was insight in 2012.
Gas prices are the lowest they've been since 2009, which brings to mind we've been forewarned they will probably climb again.
"The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next," Hofmeister told me the other day after a trip to Calgary, where he was promoting natural gas as a transportation fuel.
What will cause the prices to rise again?
"The triggering mechanism will be global demand growth relative to how much capital constraint gets baked into future plans for production this year and next. If new production capital is deferred and demand growth continues at 2% or more, we'll see capacity constraints during 2016, an election year of course, drive prices higher. Whether we reach $4 a gallon or push past, it's too early to tell."
Moreover, Hofmeister still sees $5 gas a gallon on the horizon.
Learn more by watching this video.