Sunday, October 2, 2022

Why gas prices could remain high for some time

Ryan Dezember:

Well, that’s the price for barrels that will be delivered to market next month. And by market, we probably mean like pipelines, refiner companies that will take a barrel of crude oil and turn it into gasoline, diesel, jet fuel and all the other products that come from a barrel of oil. You know, Wall Street put out forecasts early in the year, calling for much higher oil prices based on the supply and demand situation. Already, they’ve sort of torn up those forecasts, raised their prices, they think we’re going to be around $100 a barrel, which in the summer, and we’re already almost there. The main US price for a barrel of oil, West Texas Intermediate is trading around $92, $93 a barrel. That’s working out to a national average gasoline price of about $3.50. And we haven’t seen those kind of prices since 2004, before OPEC and the US shale industry got into a price war, which sort of drove prices down because everybody was trying to pump more oil for market share. We got really used to low fuel prices in America. That’s a long oil bust, and it has really altered the US producers’ ability to ramp back up quickly. You think about people who have left the industry, companies that provide services and equipment who may have gone out of business or scrapped old equipment during the oil bust. There’s just not that much equipment there. Halliburton’s CEO, they’re one of the biggest companies that serves oil producers and helps them get the oil out of the ground, their CEO told investors they’re already sold out of the equipment and the services they sell to US producers in Texas to crack open wells and get them flowing.

Nation World News Desk
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