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Jeff Siegel to Moneynews: Gasoline Prices Likely to Be Steady in 2014

By    |   Friday, 06 December 2013 07:18 AM

Gasoline prices are unlikely to move much next year, says Jeff Siegel, managing editor of Energy and Capital newsletter.

"We're not going to see a whole lot of volatility in 2014, unless, of course, something huge happens in the Middle East," he told Newsmax TV in an exclusive interview. "We do have an enormous amount of oil coming to market."

Gasoline could rise to $3.50-$3.60 a gallon next year, but Siegel doesn't think $4 is in the cards.

Gas prices averaged $3.27 nationally this week.

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He expects oil prices to rise around 2016. "A lot of the new oil that's coming on to market in the U.S., a lot of the shale oil, it's great stuff and we're pumping out at record rates," Siegel said.

"But the decline rates on those are incredibly fast, which means you really have to keep drilling more and more wells just to maintain a certain level."

As for the Tesla electronic automobile, it's a great product, but the stock is overpriced, says Siegel, an expert on alternative energy investments.

"The vehicle is top notch all the way, and if you look at some of the other small electric car manufacturers that first came out, they didn't have the technology, they didn't have the management, they didn't have the capital to get it done, and Elon Musk did," Siegel said.

Musk co-founded Tesla and is CEO.

"When the company first went public, I was very bullish on it," Siegel said. "I personally took a position. I was really surprised how fast it climbed and how high it climbed. While I'm a huge fan of the company, I bailed out earlier this year, because it just got too hot."

Tesla shares have soared 267 percent over the past year and closed at $124.17 Monday.

"I still don't think this stock is properly valued, and I suspect it's going to be a long, bumpy road ahead next year as well, regardless of how much they're expanding and how much they're growing," Siegel said.

"It's a great company. The company's going to do very well, but I do believe the stock is not valued appropriately right now, and I would stay away from it."

Major automakers are trying to match Tesla's success, but they're going to have a tough time, Siegel says.

"There's some great electric vehicles, coming out of the major auto makers but they're not going to be able to touch what Tesla has done up to this point," he said. "You see some of the luxury car makers trying to come out with their own version."

But these are just models for wealthy people who want to drive something hip, Siegel says. "What's really going to take electric cars to the next level will be pricing, and at this point it looks like Elon Musk is still ahead of the curb on that," he said.

In a few years Tesla will bring out a scaled-down Model S, which will be affordable for most middle-class drivers, Siegel says. "That's going to be the tipping point." The Model S now starts at $71,070, according to edmunds.com.

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Gasoline prices are unlikely to move much next year, says Jeff Siegel, managing editor of Energy and Capital newsletter.
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2013-18-06
Friday, 06 December 2013 07:18 AM
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