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Oil's Wild Ride Driven by Fear?

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    Ray Carbone, Paramount Options, on what is driving oil prices so high, and where they are headed.

  • Duration 2:23
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This transcript is automatically generated

There's quick market update for you.

Oil selling off today down about 2% after rallying nearly 2% yesterday Ray Carbone is president of Paramount options.

He joins me from the New York Mercantile Exchange re one of the smartest guys down on the floor -- Tellme is going on with oil right now what do you think is driving the price so high why -- we seeing a pullback today where do you think it's going.

Well I think the usual.

Reasons why it's been driven higher lately of course the Iran all of the geopolitical.

Problems going on not just in there with the Iran situation and supply disruption fears but Yemen Sudan.

Nigeria.

You name it there are problems there but so it's fear though it's not real supply and demand right.

I think a lot of it is fear supply disruption fears will trump.

Any bad economic news on any given day and we saw.

That happened yesterday yes I think it is -- but I think there are really some supply issues and that's why Brent has been very very strong.

And so it's not only that but certainly we're not exploding in demand.

Especially on the gasoline issue which I know you want to speak about.

So yes fears driving it and it's legitimate fear really look around and see what's going on there it's from its home.

The real possibility.

Quit when people are looking around for a solution -- how to drive down the price of -- gasoline at the pump.

What do you think could be done from your perspective you're -- veteran down.

Well I think ES PR tapping that is the short term answer to perhaps bring down the cost of raw material which is the crude oil and that may lead to lower gas prices.

But I think if something did happen with Iran it would.

We would pay.

Much worse on the upside move without the bullets.

We have 86% refining capacity are refining capacity this week was down 2.2 percent from.

Last week so -- know it's not a demand issue because we have.

Tepid.

Freight demand for gasoline so it's.

On the refining side you have refineries being close -- maintenance all of that we haven't had -- refinery for.

Thirty plus years we haven't had an energy pot policy really in the US since Three Mile Island so.

That is part of the answer for me.

OK you're blaming refineries aren't regular front we'll take that he's with us turn -- thanks so much and as we said.

Gas prices continue to climb today the national average for a gallon of gas three dollars and --

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