Expert puts oil at $200, gas at $6 in isles within 5 years
Crude oil could hit $200 a barrel within five years, a scenario that would bring $6-a-gallon gas to Hawaii and take a bite out of the state’s tourism industry, an East-West Center energy expert said yesterday.
Continued strong U.S. demand will help push global oil prices higher, senior fellow Fereidun Fesharaki said, adding that Americans are not likely to significantly pare back their oil consumption until it hits $200 a barrel.
“On demand side there is only one fat boy in the room, and that it is the U.S.,” Fesharaki told reporters before delivering an address at the East-West Center.
“The U.S. could lose a third of its consumption — a quarter of its consumption — and still be the largest consumer of oil in the world,” he said.
Fesharaki delivered his comments on a day that crude oil futures hit a 30-month high of $108.47 a barrel on the New York Mercantile exchange.
Fesharaki said once crude hits $200 a barrel, it could stay there “for a year or two” before Americans adjust their consumption and put downward pressure on prices. “How far it will fall? We don’t’ know, but I don’t think it will go lower than it is today.”
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Fesharaki also said Hawaii’s tourism sector is particularly vulnerable to high oil prices “because of its impact on jet fuel and the cost of running hotels.”
However, he said he did not think it would be devastating for the industry because competing tourist destinations would be in the same boat.
“You may see fewer travelers, but they can’t say they’re going to another country and not come here. All your competitors are facing the same problem.”