Elon Musk, the CEO of Tesla, a performance electric car that costs more than $100,000, thinks consumers should be shelling out more money at the pump. Try $10 per gallon.
Musk, who spoke at the Wired Live conference in New York, said consumers are just putting off the inevitable, according to a CNET report.
The prices folks are now paying are way too low and leave out "the true cost of gasoline at the pump," said Musk.
His explanation is that "nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres; it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."
Other oil analysts believe the recent increase in crude oil prices is not a good sign since prices have increased rapidly without any backing from the fundamentals, Fortune reported.
However, a majority agree that in just two years prices will rise sharply.
"We're concerned about oil prices rising so rapidly in the near-term," says Hussein Allidina, head of commodities research at Morgan Stanley. "But the bet in the long-term is one way, and that's just up."
Oil is now over $70 a barrel and has doubled since the low in February, Fortune reported.
High oil prices could prove negative in other areas such as the credit markets.
"Considering that supply seems ample and demand is weak, the fact that oil is going up looks kind of weird," says Adam Sieminski, chief energy economist at Deutsche Bank.
"But those factors are being overwhelmed by a huge sigh of relief that we're not going to have the Great Depression. A lot of money is coming out of mattresses."
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