Courtesy Photo/Image ...laughing all the way... (from coxnewsweb/ Austin American-Statesman)

Courtesy Photo/Image '...o my god.' (from Planebuzz.com, a blog for airline companies)

There is plenty of both gas and oil available even though prices are pushing all-time record levels.

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The Wall Street Journal reported March 3 and March 4 that gasoline inventories are currently at their highest levels since February 1994.

Gasoline supplies have been on the rise for the past four months and typically peak in February. This year, that peak is the highest in 14 years.

On top of that, during the past six weeks gasoline consumption has fallen by an average 1.1 percent from year-earlier levels, according to weekly government data. That is the most sustained drop in 16 years.

The average cost of a gallon of gasoline was $3.50 a gallon on much of the West Coast and above $3 a gallon nearly everywhere in the U.S., according to March 4 reports from the AAA Auto Club.

The lower state averages that day were around $3.08 a gallon in Utah, South Carolina and Arizona. The lowest state average was $3.01 in Wyoming, AAA said.

“In a sign of the growing disconnect between demand and the market, prices at the pump are being driven higher by a powerful rally in crude oil,” WSJ writer Ana Campoy wrote March 3.

The crude oil price fell $2 a barrel March 4, but was still above $100 a barrel, an all-time record.

High prices generally are caused by low supplies, under the economic law of supply and demand, but not so when it comes to gasoline or crude oil.

“We are nowhere close to reaching a peak in global oil supplies," wrote Nansen G. Saleri, the reservoir manager of Saudi Arabia’s nationalized oil company, Saudi Aramco.

Saleri told Wall Street Journal readers that there are trillions of barrels of oil underground around the world. He foresees no serious shortage for up to 100 years. Supplies won’t even start to slacken until the middle of the century, he said.

Liquid crude supplies will sustain production rates at or near 100 million barrels per day – the current use in the world -- nearly to the end of this century, he wrote in a March 4 WSJ guest editorial.

Saleri’s estimates are partially dependent on high prices of crude oil.

“Hundred-dollar oil will provide a clear incentive for reinvigorating fields and unlocking extra barrels through the use of new technologies,” he wrote.

“Even a 10-percent gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional 50-year supply at current consumption rates,” he said.

Saleri estimates the peak of oil supplies will arrive between 2045 and 2067. And then, an “undulating, multi-decade long plateau production era” will set in, so there will be no sudden dearth of supplies.

How far we’ve come

Between 2003 and 2006, the price of gas increased 60 percent. Since then, it has increased another 40 percent, totaling a 100-percent increase in the past five years, according to the WSJ.

Why are gas prices so high? Speculation fever, according to many observers, some of whom also believe that mega-oil companies face little-or-no offsetting check or balance on their price-setting power.

WSJ writer Ana Campoy said traders on commodity floors are fueling the fever.

Investors are “piling money into commodities as a refuge from inflation,” she said.

More from Dr. Nansen G. Saleri (the WSJ)

“Current daily global consumption stands around 86 million barrels, with projected annual increases ranging from 0-2 percent, depending on various economic outlooks. Thus, average consumption levels ranging from 90 to 110 million barrels represent a reasonable bracket. Any economic slowdown -- as intimated by the recent tremors in the global equity markets -- will favor the lower end of this spectrum.”