Drivers best start bracing for another surge in gas prices amid the conflict between Russia and Ukraine and years of under-investment by the oil industry, warns one veteran energy strategist.
“My guess is that you are going to see $5 a gallon at any triple-digit [oil prices] … as soon as you get to $100. And you might get to $6.50 or $7. Forget about $150 a gallon, I don’t know where we will be bv then,” Energy Word founder Dan Dicker said on Yahoo Finance Live.
Dicker said oil prices could shoot higher to $150 a barrel, or in line to the “super spike” highs from 2007.
Oil prices have been red-hot lately as geopolitical tensions rise between Russia and the rest of the world.
WTI crude oil has climbed 13% in the past month to $94 a barrel. Russia produces 10 million barrels of oil a day, the equivalent of 10% of global demand. Any loss of that oil due to geopolitical issues could cause a tightly supplied market to become tighter, pushing prices for the hydrocarbon up.
The march up in oil has pushed gas prices further higher from already elevated levels.
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Gas prices are coming off their seventh straight weekly advance, according to data from GasBuddy. The national average is up 16.5 cents a gallon from a month ago and 97.2 cents a gallon from one year ago.
The average price nationally for gas currently stands at $3.47.
“Not only are oil prices up, but the bulk of the nation is starting the multi-month transition to summer gasoline, further adding to the rise at the pump. In addition, cold weather in Texas last week caused some power outages at major refineries, further weighing on markets. I see no other potentials in the short term but additional price increases unless Russia does an about-face on Ukraine. Even then, we’ll still see seasonality push prices up, so motorists should be ready to dig deeper,” said Patrick De Haan, Gasbuddy head of petroleum analysis.