There was a time not so long ago, three years to be exact, when $100/barrel oil and $4/gallon gasoline caused terror and panic among the drivers of Southern California. Here in 2011, as oil makes a slow but steady march toward that $100 level and local gas prices hover around $3.50/gallon, the same sense of dread is not present—in fact, drivers don’t even seem to be that annoyed. That’s a good thing because oil prices will most likely be staying high for some time, as OPEC countries seem very content with more expensive oil. Their thinking is that as the global economy slowly but surely recovers from the depths of recession that they should be cashing in, after increasing oil output for the past few years to keep prices moderate. Could higher oil & gasoline prices shock the American economy or are we used to it by now?
*The Department of Energy’s gasoline price survey found the average price of a gallon of gas in Los Angeles is $3.35.
Tom Kloza, editor, publisher & chief oil analyst of the Oil Price Information Service
Mark Lacter, editor of the L.A. Observed business pages & business analyst for KPCC