Gas prices rise, could hit $4-per-gallon by summer
DeHaan says all eyes are on Russia near Ukraine
Buffalo, NY (WBEN) Going up. Again.
Gasoline prices have been on the rise across the country in recent days and Americans watch the price move faster on the pump as they fill their tanks.
One industry analyst tells WBEN the biggest factor is across the ocean in Europe, and gas prices will only go up more.
Patrick DeHaan says there's one big factor. "Much of it is what's going on with Russia and Ukraine, the concern being that the world's second largest oil producer in Russia could control or limit exports should the US retaliate with sanctions, and that could bring prices up considerably," notes DeHaan. He says oil prices are at about $94 a barrel, the highest price since 2014.
Even though 6 percent of the US's crude oil comes from Russia, DeHaan says anyone can play a role in influencing oil and gas prices. "Anyone who consumes or produces crude oil can be affected by anyone else who consumes or produces crude oil, simply because there's so much freedom in the market to buy from one person or another. If Russia has customers, or if Russia stops shipping oil to its customers, those customers are simply going to buy oil from the same countries we do business with, which will still simply push up demand. And so it doesn't matter who it is, whether it's an issue in the US that impacts oil production or another oil producer, but we're all tied together. For better or for worse," explains DeHaan.
DeHaan says the blockade by truckers at the US-Canadian border won't have as much an impact. "The border crisis is above the ground, whereas many of the oil pipelines that connect oil, the oil between the US and Canada are below the ground. So there's not much of an impact there," says DeHaan. "Another further supply chain disruption among automakers certainly could make portions of the uneven or lumpy recovery worse. So there's the possibility that there could be collateral damage. So I don't expect any from directly from the trucker, or I should say, the convoy or the border crisis."
The bad news is DeHaan says gas prices are going nowhere but up. "During a normal year. seasonal changes between March and memorial day usually boost prices anywhere from 25 to as much as 75 cents a gallon," says DeHaan. "Those seasonal factors that usually push up prices are things like the switchover to summer gasoline, which is starting in earnest, which will take a couple of months. Demand for gasoline is going to start going up here in the next few weeks as Spring Breakers start to get out and about and that will segue into warmer weather and rising demand. And refiners are also going to be doing maintenance which contributes to less production until that work is carried out and prices certainly go up as a result of all three of those factors." He says $4 a gallon gas is a possibility.
Gas is hovering at $3.63 a gallon in the Buffalo-Niagara region.
