Energy Experts Expect Another Spike at the Gas Pump

At the moment, the price of oil is over $106/barrel and there is no end in sight to the Iran war and the closure of the Strait of Hormuz.  The Felon continues to lie and bloviate about the war ending "soon" and has manipulated both the oil and stock markets (which have seen evidence of insider trading), but energy experts are anything other than upbeat about lower prices for oil or gasoline anywhere in the near term.  Indeed, even if the war ended tomorrow, the impacts on oil prices, the global economy and gas prices at the pumps in America would likely take months to subside much less slide back to pre-war levels.  The Felon and his sycophants are ignoring expert warnings - just as the Felon ignored warnings about Iran closing the Strait of Hormuz - that any recovery will take months and seek to spin a tale where everyday Americans will not be bearing the consequences of the Felon's war of choice. A piece in the New York Times sums up the current situation: 

Oil prices continued to surge on Thursday, hitting a fresh wartime high above $126 a barrel on concerns that the war in Iran could escalate, leading to a longer disruption of fuel supplies from the Middle East.

The average price of regular gasoline in the United States has followed oil higher, hitting $4.30 a gallon on Thursday, up 27 cents in a week, according to data from the AAA motor club.

Higher energy prices and the lingering effects of Mr. Trump’s tariffs are expected to keep inflation elevated through the rest of the year, Bernard Yaros, the lead U.S. economist at Oxford Economics, wrote in a note. “Inflation will get worse before it improves,” he added.

The World Bank estimated that the war in Iran would push energy prices up 24 percent this year, according to a broad index covering oil, gas and coal. “The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices and finally, higher inflation, which will push up interest rates and make debt even more expensive,” Indermit Gill, the World Bank’s chief economist, said this week.

The Felon promised during the 2024 campaign that he'd lower prices and inflation and supposedly many working class Americans believed the lie (rather than being attracted by the Felon's racism and bigotry) yet the opposite has been the case. The latest Comey indictment and attacks on ABC will not long distract voters from the economic pain the Felon has caused.  A piece at Politico looks at the potential longer term impacts of the Felon's war of choice:

Energy experts say another oil price spike is coming — and it may be made worse by the president’s social media posts.

[The Felon] President Donald Trump has repeatedly spurred temporary dips in oil prices by claiming on Truth Social that the Iran war is near an end and that U.S. oil production would ensure sky high gas prices would soon retreat.

The jawboning has mostly worked. Even as the global price of oil has crept up over $100 per barrel on the futures market, it is significantly less than the $140 per barrel spot price, or what it would take to buy a barrel today. But the [Felon's] president’s promises can only work for so long. Supply of oil — especially in Europe and Asia — is dwindling and a price shock is coming, said Dan Pickering, chief investment officer at Pickering Energy Partners. He said that when the summer driving season begins there will be another gas price shock that “hits people in the face.”

“There’s a day of reckoning coming,” he said. “It will be painful because I can tell you that the stock market’s ignoring this.”  Another spike in prices around Memorial Day could be a fatal blow to Republican chances for holding onto the House next year, as Americans’ confidence in the economy continues to drop.

[The Felon] Trump on Monday was reviewing Iran’s latest peace proposal, which arrived after he canceled his top negotiators’ planned trip to Pakistan for talks. He continues to maintain that a quick resolution to the war with an agreement to reopen the Strait of Hormuz is within reach.

And inside the White House, confidence remains high that markets will soon stabilize, despite U.S. gasoline prices having increased by more than $1 a gallon since the Iran war began, a major reason why the conflict is so unpopular with the American public.

Last week, [the Felon] Trump said gas prices would drop as soon as the war ends.  But Rosemary Kelanic, director of the Middle East Program at the libertarian-leaning Defense Priorities think tank, said the administration’s confidence that normalcy is just over the horizon is keeping American oil companies from producing more. Why, they say, invest in production when the war is about to end. The problem is if the war doesn’t end very soon there won’t be enough oil for the world, she said.

“By talking down the market so effectively, when the price spike becomes inevitable, it’s going to hurt way worse because we’ll have lost weeks or even months of time where producers could have been ramping up output,” she said.

“Our hypothesis is [that] the paper market is being manipulated,” the respondent wrote. “This will likely lead to an even worse supply and demand imbalance and higher prices in the medium term (next 12 months).”

A growing number of market analysts are reaching a similar conclusion. On Sunday, Citigroup revised upwards by $15 its expected average price for a global barrel of oil to $110 in the second quarter and $95 in the third quarter. But if the Strait of Hormuz remains closed through June, Citi forecasts a barrel of oil reaching $150.

Since the U.S. and Israel attacked Iran in February, much of the world has been using oil and liquefied natural gas loaded on tankers before the war broke out, supplemented by what’s in storage. But that will only last so long. Asia is already experiencing “steep declines” in storage, said Jenna Delaney, Rapidan Energy Group’s Director of Global Crude.

“Global refineries have already cut runs due to challenges sourcing crude,” she said. “Refined product supplies are already strained at current refinery run levels, and demand typically rises in the summer.”

Oil inventories in some countries are days or weeks away from hitting “operational minimums,” Natasha Kaneva, head of global commodities research at JPMorgan wrote in a recent note to investors. That could mean parts of the global energy system start to collapse, refineries will struggle to operate, energy flows will bottleneck and more.

[I]n a best case scenario, it will be take longer than just a few months before gas prices settled to the level they were before the war, said Emma Anderson, author of “Oil, the State, and War: The Foreign Policies of Petrostates” and a senior fellow at the Stimson Center, a foreign policy research institute in Washington. The real impact on Americans will be inflationary and is likely already locked in, she said.

“Prices at the pump are going to go up over time,” she said. “The costs of goods are going to go up as diesel goes up. Shipping will get more expensive. Trucking will get more expensive. The things you buy at the store will get more expensive.”

More "winning" thanks to the Felon.