Tags: Gasoline | Prices | Obama | oil

Experts: Gasoline Prices Poised to Keep Soaring in Blow to Obama

Thursday, 09 Aug 2012 09:39 AM

Pipeline leaks, refinery fires and growing fears of a European collapse are sending oil prices soaring, which doesn't bode well for President Barack Obama, experts say.

The national average of a gallon of regular unleaded gasoline has risen by more than 27 cents in a month to around $3.66, according to the AAA Daily Fuel Gauge Report.

Cash-strapped households are sure to feel the pain.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

“The problem is that the price of gasoline is a very visible, tangible piece of evidence to the problems of the economy," said Lee Miringoff, director of the Marist College Poll in Poughkeepsie, N.Y., according to the Christian Science Monitor. "It is something people experience in a direct way, as opposed to some of the economic indicators which are more abstract.”

“It comes as unwelcome news to Team Obama.”

A Chevron refinery near San Francisco, California, caught fire recently though firefighters contained the blaze, while a leak at the Enbridge pipeline in the Midwest added to supply concerns.

Meanwhile in Europe, consensus has been building that policymakers may give the European Central Bank power to work in tandem with bailout funds to buy sovereign debt in the open market to drive down borrowing costs for countries like Spain, which would ease the debt crisis there.

Oil falls when the debt crisis escalates on the notion that a troubled Europe will grow slower and need less oil and fuel to operate.

Optimism Europe will work its way out of the crisis sends oil rising.

“It’s called the Mario Draghi bounce,” says Phil Flynn, a senior market analyst at the PRICE Futures Group in Chicago, referring to the president of the European Central Bank, who has been working on ways to solve Europe’s debt woes.

“If he is successful at bailing out Europe, it will keep oil prices high.”

Meanwhile, U.S. gasoline prices spike in August, when more Americans hit the road for summer vacation.

The Chevron refinery fire stoked particular concerns in that the complex's closure resulted in the temporary loss of about 15 percent of the gasoline produced California, The Christian Science Monitor added.

"We're working to repair the affected equipment so that we can resume normal operations as soon as we can do so safely," a Chevron official said in a statement, according to Reuters.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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