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Why the Gas Price Drop is Misleading

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    OPIS chief oil analyst Tom Kloza gives his outlook for oil and gas prices.

  • Duration 3:15
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Yeah definitely aren't you heard -- Gasoline demand -- third -- and around prices at the pump turning slightly higher today.

After 28 days of consecutive declines the national average for retail unleaded now stands at 373 -- gallon.

That's actually about 23 cents lower than this time last year for my next guest says that number is misleading Tom close that is cheap oil analyst at openness.

Tom you are the man with your finger on the pulse of the gas hike is of gas pumps had -- says but let me ask you don't looking up -- -- RS.

Why do you think that numbers misleading.

It's misleading Melissa because of the West Coast has gone absolutely not so last week which -- prices their -- of fifteen to -- accents.

Really the rest of the country appear anywhere east for the Iraqis to do -- sort of a slow slipped.

Lower and I I suspect that may continue for awhile but you if you would -- -- -- western time -- really have to watch -- these are the lowest gasoline inventories.

Since may of 1992.

At least for bag and that's a lot of people been added to the motor pool and that's.

Yeah I mean we have a map that really shows -- you can see it in places like you -- Virginia Kentucky using gasoline is down.

Better than thirty cents but then when you look on the West Coast of the exact same time of the same month.

Using gas in California go up twelve cents what did you say is the reason behind that.

Well I I -- We -- refinery issues on the West Coast that we have the lowest basic inventory of gasoline into wanna years now eighty there's plenty of motivation to run these refineries you can sell gasoline -- on the West Coast so.

In the Pacific northwest for about a 150 dollars a barrel.

The equivalent of that -- the Gulf Coast as you -- gasoline for about a 117.

So we've got tremendous diversity and there's -- big profit motive to get those things -- and on the West Coast and I suspect they well.

-- -- -- the East Coast a little bits and we've seen prices decline it you know for about twenty days they've seen seem like -- sort of -- that we sought tick up overnight.

I -- thing on the East Coast we've seen a bottom and they're coming back higher.

I wouldn't say that no I think prices in the second quarter and really for the next few weeks are going to be zombie like her a little bit lower and I do see pressure on the crude oil market the second -- allows you period for crude he won't have -- ran as part of the equation probably till July.

And we do have a lot of domestic crude that's accumulating in the middle of the country but it's misleading to.

Look crude oil figures and say it's the highest US stock since 1990.

That we had a couple continents that really didn't participate in global demand back then.

Briefing the -- loyalists -- we watched a breakdown -- you know 91 box and changed dates back to 93 but really low levels where you think it's going.

I think we're headed to where the saudis wanted to be which is about a hundred dollars for -- -- about ten or eleven dollars lower.

It may be something in the 85 to ninety dollar a barrel range for WTI.

Gasoline I think we're looking at something between three to 45 -- for nationally.

Which is you know pretty comparable to last year but it's very high relative to all other years except 2008.

When the world became untethered.

Tom great -- I've been following your data for more than a decade you're always spot on thanks so much for coming on we appreciate it take --

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