Tags: DeHaan | West | Coast | Gas | gasoline

Crude Expert DeHaan: 50-50 Chance West Coast Gasoline Price Surpasses $4.50

Tuesday, 21 February 2012 08:36 AM

There's a good chance gasoline prices will flirt with approaching $5 along the U.S. West Coast this year, says Patrick DeHaan, senior petroleum analyst for GasBuddy.com.

"I give $4.50-per-gallon gasoline on the West Coast better than 50-50 odds," says DeHaan, according to the San Jose Mercury News.

"Some stations could be closer to $5 in remote areas. ... It's just a matter of time before motorists are again ransacked at the pump."

Sanctions from the West have prompted Iran to cut off oil supply to parts of Europe, while refineries have been closing in parts of the U.S. in response to falling demand brought about by higher prices.

Gasoline prices rise anyway during the spring and summer thanks to increased driving and more expensive feedstocks used in refineries to blend fuels, while demand for crude from emerging markets will pressure supplies even more.

All of those factors combine into a nasty cocktail for those sensitive to pain at the pump.

Gasoline prices could also spell bad news for President Barack Obama.

"At $3.50 a gallon, energy is a talking point. At $4, it's the first talking point. At $5, it's the only talking point," says energy analyst Kevin Book, the San Jose Mercury News adds.

"The last data point we have on presidential polls and pump prices for an incumbent president is 2004, but approval ratings and average prices were almost perfectly inversely correlated then."

Some economists have pointed out that rising gasoline prices could hamper growth.

"It's an additional burden on already burdened households," says Judith Dwarkin, Chief Energy Economist at ITG Investment Research, according to the Associated Press.

The White House is aware of the growing problem.

"The president is keenly aware of the impact that higher gas prices have on families trying to make ends meet," Jay Carney, the White House press secretary, said recently, according to the New York Times.

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Tuesday, 21 February 2012 08:36 AM
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