Tags: Schork | oil | 4 | SPR

Energy Expert Schork: Gasoline to Hit $4, Govt Will Likely Tap SPR

Wednesday, 22 Aug 2012 02:34 PM

A gallon of regular gasoline will likely average near $4 nationwide in September and prompt the government to tap the Strategic Petroleum Reserve, says Stephen Schork, president of the Schork Report, which tracks global oil prices for traders and investors.

Some 33 million Americans will hit the road over Labor Day weekend — the highest number in four years, according to AAA, pressuring prices that don’t normally climb in September upward.

Maintenance issues on North Sea oilrigs and fears of a military conflict between Iran and Israel have stoked supply concerns and have pushed crude oil prices up and gas prices with them, he tells Yahoo.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

A gallon of regular gasoline currently averages $3.72 nationwide, according to the AAA Daily Fuel Gauge Report.

High prices are more typical in spring and summer, when demand from motorists rises and when refineries rely on more expensive warm-weather inputs.

“It’s very abnormal for Americans to be paying more for their gasoline in September than they were in July,” Schork tells Yahoo.

For every $10 increase in the price of a barrel of crude, retail gasoline prices rise a little over 2 cents for every dollar, Schork says, and recent gains in both crude and gasoline will prompt President Barack Obama will to tap the Strategic Petroleum Reserve in an effort to push prices at the pump back down.

“Odds are now that Americans will be paying upwards of $4 a gallon for their gasoline well into September. That is well onto the eve of the presidential election,” Schork continues, adding tapping the country’s stockpiles would be politically driven since supplies are healthy in the United States and price hikes are due to factors overseas.

“Right now with Americans potentially paying $4 a gallon, that is more than 50 cents more than they were paying on the July 4 holiday and nearly $1.50 more than they were paying four years ago when Obama was debating for his first term.”

The White House recently confirmed it was considering releasing crude from the U.S. Strategic Petroleum Reserve, which is designed to meet demand during emergencies.

“As we’ve said for some time, a release of the Strategic Petroleum Reserve is an option that is on the table,” White House spokesman Josh Earnest told a news briefing, according to Reuters.

“The administration does carefully monitor the global oil market and the global price of oil.”

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible


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2012-34-22
Wednesday, 22 Aug 2012 02:34 PM
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