Goldman Sachs analysts now say they can foresee another $80 tacked onto the new $122 a barrel oil record. It’s an extension of their “super spike” theory, the one that once predicted (SHOCKING!) oil at $105 a barrel.
Assume for argument’s sake that that everyone keeps getting, proportionately, the same piece of oil’s financial action that they’re getting now. That would put gas at about $5.72 a gallon or more when oil hits the magic $200 mark.
We’re talking $100 for a typical 17 gallon tank that was costing you just $34 as recently as the last time the White House was up for grabs.
At some point you might as well just get out and push. (That’s actually why I quit driving the nitro-fueled funny car to work. I do miss the 93-second commute, but then again, it was hard to park.)
If you’re driving 40 miles each way every workday, $200-a-barrel gas is going to cost you maybe an additional $100 a month from what you’re paying now.
That’s a lot, but what’s the alternative? Selling your house and moving closer to work? You’d have to move halfway closer to the job and pay a bargain-basement $200,000 mortgage for five years to recoup just the bank fees with your gas savings.
And that’s saying nothing of the bath you took on the real estate, the stuff you broke during the move or what you’re actually saving when gas drops back to a relatively reasonable $5 per gallon.
How about selling your car and getting something more reasonable? If you’re getting 20 miles a gallon now, you’d have to trade in for a 32 mpg model to match today’s per-mile fuel cost.
You know what vehicle gets 32 mpg, according to Car and Driver magazine?
The Smart Car.
Yeah, that little French two-seat number that looks like the egg that Robin Williams popped out of in the opening credits of Mork and Mindy. But with wheels.
The Smart Car is four feet shorter than a Volkswagen Beetle. AND it requires high buck 91-octane gas, to boot. You aren’t trading the Corolla in for that thing, let alone the Volvo XC70 or the Ford F150 XLT.
Here’s what the News Cut Strategic Global Petroleum Index Assessment™ says: Whatever Goldman Sachs says oil is going to cost, you’re gonna pay it.