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Platts Global Director of News John Kingston on the outlook for oil and gas prices and what is needed to bring down the price of gas.
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-- oil may be dropping the gas prices remain high nationwide particularly for those on the West Coast San Francisco the price for an average gallon of regular unleaded.
For a box 41 cents -- -- away and John Kingston global director of news -- oversees energy coverage for Platz thanks for coming in tonight.
Great to have you -- -- why is there such a disconnect.
Between gas prices and oil prices.
Well first of all you really and the real reason is because the price at the street is very much controlled by -- street.
The oil companies themselves -- the price every day sometimes twice as they called the -- -- -- the wholesale level.
That number is very sensitive to what's going on in the broader market it will move with the price of gasoline and if you track.
The S spot price of gasoline on the nymex against those -- wholesale prices you find them pretty much in line.
When you get down the street level look these are individual want to open doors.
They they are going to keep their price up as high as they can they don't know what wait until the guy down the street gets cheaper load and he load lowers his price.
So there's always out -- you -- the -- is.
The -- -- faster this FS on the way up that it is on the way down -- -- the way it.
Feel no it is really is that -- that.
You know you can see the oil prices come down and you're still waiting at the pump for some -- change -- your point that.
At street level at least that the gas station owners really control what's going on completely.
I I have to tell you when I interviewed then.
They say they are being held hostage by other people out there tail well all notices that they're buying off the -- Those prices are very transparent the very public we we produce some some of our competitors pop and I think we produce some.
We publish them our competitors posts and everybody knows what they are -- -- -- this.
Take for gas prices come down from releasing them lower for Memorial Day weekend I think so I can imagine why not come actually you know they they are down the the EIA weekly averages down about eighteen cents from its high.
The the fact is that some of the movement has not gone through you continues to decline come from here to Memorial Day that's.
That's a slam -- knowing -- that price is going to be lower our great well you say that -- and that's good -- easy for consumers prices coming down.
Is -- sustainable well I think it is sustainable for really one reason the the OPEC nations are producing a lot more crude.
Than anybody really anticipated that they would they are producing a lot more crude and you need just to keep inventories stable in fact by on a level I haven't seen in years.
There is now a lot of oil in the world the world is really getting ready for the EU cut off of Iranian oil.
Hearings are having trouble finding new home with without oils that sort of effectively amounts of -- cut.
But OPEC really has stepped up in anticipation of a drop in -- -- -- -- so where of this -- was looking like it might be cause for real spike.
Right now I think the inventory goes and so significant.
That we're gonna get through some without any kind of -- -- has.
-- would turn around is that the Iranians really do lose.
About 400 -- 50000 houses they have outlets and they can't find new customers for which right now no new customers -- really publicly stepping up.
And as a result of that that's a production cut -- draws down those inventories.
It's a pleasure having thank you -- great jobs and you but plain English -- very difficult under.
