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Energy Management Institute Senior Partner Dominick Chirichella on the rise in oil prices and its impact on the economy.
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Oil prices spiked this week -- new fears of supply -- from the conflict with Iran -- gas prices continue to go out and does the government how to plan.
To easy York teen act to pump dominate chair Chal.
The senior partner at energy management institute is here with us now and -- it's great to have you lot and we -- crude oil rise about six point 3%.
And what we're seeing is a supply side story going on here we have geopolitical tensions we have constraints have now are happening in -- -- ever us -- about speculation and all of this you know speculation.
What we're not seeing is demand demand ticking off just yet when demand gets in get introduced in this whole dynamic it throws everything off.
So what are we gonna start to see this push and pull sort of -- maybe the demand part come into the into the equation.
I think I think.
Coupled with the fact that.
The economy's just grown very very slow as the -- the world continues to go higher.
Did -- -- demand equation is not going to click here we are gonna start seeing elasticity of demand.
Especially as -- -- gasoline prices in the United States over four dollars a gallon across the country.
As we see higher prices in Europe actually we we we we're seeing something a little bit different than we server 2008.
It could run out and that he -- -- -- the dollar is stronger now so that were already at record highs being in terms of Euro.
-- -- oil prices.
Thirty dollars a barrel less than where we were in 2000 and -- know what.
Bring this ship back -- little bit closer to the coastline here is it is it.
A consumer starting to pull back is it something that the Fed can do on the what are some and that -- easy easing measures that we could see act again.
Well I think one of the things that we can do was a country is to have a Federal Reserve.
Chairman come out and say that we're not gonna don't want QE3.
We keep seeing numbers that are better and better for the economic growth and and and the likelihood.
Of having to usually QE3 is becoming less likely.
But we should say that.
And I think that that will change.
The mindset of a lot of the speculators in the market place.
People trade and now we're Bernanke put the market and there's not a lot of downside to go long oil go long risk assets and coupled with the geopolitical put.
It's really not difficult and eliminate some of him.
Now but here's the thing I guess Dominique from from the Fed's point of view they're trying to create this virtuous cycle that is happening kicked in the with all the money printing that they've done.
Where I guess you know home prices are going up the stock market's going -- we build better.
We spend more money and all of a sudden we hire more people amounts going now we've got this cycle and it's sort of maybe self perpetuating.
Maybe -- weighing the risks today and saying you know what just higher gasoline that's something we'll have to -- -- except.
You've been it to helped trigger this.
And not going to restaurants and not going -- divide those -- work.
Can we go from -- -- what's it you know listen right now we know when it goes parabolic he goes parabolic it feels like this a classic breakout.
Words the number that we can go to from here if indeed I rang gets worse and then -- and there's a big money printing operation next week.
By the EC -- I think we can easily test that we've got the 2008 highs of 1470.
147 bucks I actually think we can and -- go to 150 and -- I think the other the other wildcard from a geopolitical event that is the we may very well be seeing military action from the west in Syria.
Before too long and if that happens it's only gonna.
Unstable the Middle East -- for went up 200 accurate calls for 200 I think if we start seeing in real shortage of oil -- If if if if Iran.
And embarks on the military adventure or Israel and walks in the military adventure and certainly there's going to be a big interruption in supply.
Right now we don't have an interruption in supply we have the perception of an interruption.
If he gets real shortly 200 dollars is realistic and -- -- for the Syrian people they don't have any old so what's coming to the rescue.
Anticipation being worked in the world around in this market and that is what is causing the the -- markets -- spike up to date that you very much dominate.
Sarah -- from the energy management institute thanks for being thanks a -- -- project that well to.
