Are you tired of paying more and more every day to fill up your vehicle? Well, say good-bye to gas pains. Relief from suffocating prices is on the way and it’s just in time for summer.
After 44 straight days of rising prices, things may finally be leveling off. Tom Kloza, OPIS Chief Oil Analyst, joined Varney & Co. this morning to share the latest on high gas prices.
“Essentially gasoline has to catch up with the crude decrease we saw last week and, on a relative basis, gasoline is incredibly expensive versus crude,” said Kloza. “It’s selling for about $35 per barrel over the price of crude and that’s really because of the fear of our floods along the lower Mississippi, and should those refineries get knocked out, those high prices could be justified.”
But fears of higher gasoline prices are rising along with the level of the river in Mississippi. Refineries near the banks supply a large percentage of fuel across the Mid-South. Analysts are afraid the floods may interfere with production, causing the flow of gasoline to come to a halt.
But if the floods subside, and the refineries are not damaged, the gasoline price spike is likely to be over. Could we be on the verge of a serious price decline for gasoline in the immediate future?
“This week I think it’s a slow drift,” said Kloza. “I think we drift down, perhaps $0.10. If we clear through the flood problems at the gulf coast, that’s the only thing preventing another $0.20 or $0.30 drop.”
And if gas prices fall a total of $0.50, US drivers will save approximately $189 million per day. So what kind of impact will it have on the economy? Economists hope the decrease in prices will boost Americans confidence and increase spending, which accounts for 70 percent of the U.S. economy.