You're watching...
Oil analyst Stephen Schork on the impact of Tropical Storm Isaac on oil prices.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- and echoes our stated short -- for the -- group looking at the impact on oil from all of the visited Steven look at you handicap that the way things are looking from your front.
Right now what we're seeing now is it difficult situation -- in the Gulf of Mexico because not only do we have refineries that are being shut down.
But more importantly over the weekend.
-- -- a refinery in Venezuela which is the largest for the second largest refinery complex in the world how to fire explosion.
And -- there -- 600000 barrels a day of refining capacity that is on the shelf right now.
So what we saw today was a significant surge in gasoline price is not only in the Gulf of Mexico but also up in the midwest.
What is happening now is head of based said the national oil company Venezuela.
We're seeing in the market buying securing supplies from US refineries that are now shutting in or at least running at limited capacity.
So the -- and now is for a short term shortage in thin supply.
From these -- -- realities which could cause -- significant rise in gasoline prices for consumers in the weeks ahead.
When you say significant Steven what what does that mean.
Well right now we're in a situation very odd situation where Americans are going to be paying more for their gasoline in the month September the new war -- in the fourth of July holiday.
Gasoline prices on a national average 33 dollars and 75 cents a gallon they were below three dollars and forty cents on the fourth of July holiday.
Now we've had a significant run up in crude oil prices the refinery acquisition cost in the month of August.
We already know from the correlation that we're looking at probably another fifteen cent rising gasoline prices.
And that was before the shortages that are being created by the Amway with -- good refinery and hurricane -- -- so right now the and the September consumers are potentially looking at three dollar and nine cent average.
Which of course means that insignificant -- good deal of the -- we're going to be paying more than four dollars a gallon.
-- our gasoline at the in the September.
Deal.
Find it weird that this runup in gas prices almost on erupted for the last month.
Coming after an almost uninterrupted price decline in gas prices in the prior month.
I just haven't a tough time right now Steven knowing which is real of the move down -- now the move up.
Now it's it's a fair question in what we have now was a situation where we had the run up to begin in the fourth quarter of last year and the first quarter of this year on concerns related to the embargo with Iran.
Prices got to such a level there we saw a significant demand destruction we're talking a 130 dollars a barrel in the global price of oil.
We did have a significant correction oil prices on the global market didn't break back below 100 dollars and now they've rallied but -- were at a situation now where we're.
Creating tremendous demand destruction I'm -- the opinion.
That US consumers not only -- consumers here in the US but if you.
Translate oil prices today and it's -- main European currencies pound sterling and the Euro.
Europeans are now paying record amounts for their gasoline seven dollars and fifty cents -- -- doll seven dollars and fifty cents for a gallon.
That's significant you figure the UK is in a severe double dip recession the cots and it's not that far behind.
These people -- hot before oil at these prices so we're now pushing the envelope so to answer your question.
He worked real when they got 230 dollars a barrel back in the first quarter they were not real when they got back down below 100 dollars.
In that the second quarter now that we're back above -- 115116.
Dollars a barrel for the real price of oil.
We're probably -- -- 1015 dollars and above and beyond where demand justifies it at this point.
Alright Steven Jordan thank you the short group follows -- -- -- music --
