Gas Futures Soar & So Will Pump Prices Again?

Fox Business reports that gas prices are projected to surge again after a brief dip, reaching $4.20 a gal on average, as gasoline futures rose 30 cents in recent days.

Andy Lipow, president of Lipow Assoc., explained that while several states have temporarily suspended their excise taxes on gasoline, thereby lowering the average cost per gallon nationally by a few cents, the news from Russia and the Middle East triggered that big price rally offsetting the tax savings. The first shoe to drop was OPEC advising investors and the producers it could not replace a complete loss of Russian oil; the second shoe to drop was the news that the EU is seriously thinking about adopting a phased in ban on the purchase of Russian oil and gas” while the U.S. has already done so. Russian gas to the EU and US is about 5 million barrels per day.

“How does the world come up with nearly 5 million barrels per day of alternate supplies … [if the worst case scenario happens]?” Lipow rhetorically asked. “It simply can’t do it today” so the market will set prices accordingly.

Davd Soul