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Kloza Warns Midwest of Rising Gas Prices in Spring

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    OPIS chief oil analyst Tom Kloza on why gas prices are rising.

  • Duration 3:49
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-- -- gas prices up thirteen point 3% in the past month alone.

According to triple -- even as oil prices remained pretty much flack in the same period so.

So what gives no one but at a loss than Tom clothes that he's the chief oil analyst for.

-- which provides AAA by the way with gasoline -- -- right from the horse's mouth he joins us now.

By the telephone Tom thank you so much so okay crude has been in a pretty much the same ranges Phil Flynn just -- the bulls and the bears.

Kinda hashing it out in the prices -- -- 9597.

Bucks but gasoline.

Has just been taking off why.

Well I think that the trading community is anticipating all sorts of imperfections.

That the end of the first quarter for -- there's a lot of maintenance it's underway with refiners.

And there is to switch that comes later in the quarter between blue winter gasoline in the summer gasoline but.

The money is pouring evidence pouring into support gasoline futures until.

Certain extent crude oil futures and it tends to anticipate.

All sorts of different comedies and probably -- that won't to exist I think.

Were on an earlier trajectory this year we've seen this movie before this moving -- climax last year and April 1 and we may be on a similar path.

So you say we could see more.

Play -- pain at the gas pumps and then for the rest of the you say will be paying more -- like Patrick stay that we will.

A Memorial Day is that right.

Yeah that's what I would I would do to agree would I think that will see prices peak early this year just as they did last year.

And last year we dropped tremendously between April 1 and actually July 2 so -- there's incredible incredible motivation to run refineries right now when you talk about crude oil prices you'd heard about gasoline and diesel selling for thirty or 35 dollars more than the price of crude.

Even -- fifty dollars if you run Canadian crude.

But it's interesting because OPEC from what I can understand that's always hard to believe what they're actually doing but apparently they are cutting back on production even as we getting full costs for -- -- -- -- this year.

Those two.

Items alone seems to me would push up the price of oil.

They might except for the fact that the US is in the middle of and oil shale revolution and now we recently passed production numbers that we haven't seen since December of 1992.

We're gonna see a lot more Canadian oil come to the market and actually hit the Gulf Coast by the end of this year we probably won't be importing any light -- sweet crude at all.

So who we do have a singular edge here in the US than in North America right now it's -- not manifesting itself from lower gas prices but I do suspect that it will.

In the last recorders of the year.

And Tom quickly say that there are two other factors -- of creating some gas sell price spikes firstly one that involves the East Coast.

Yeah actually the East Coast is it is kind of the victim of two things number one European refiners don't have the -- -- US ones do with natural gas cheap.

And we're not getting those imports but secondly it's something that I think is more sinister.

Even though -- get the tremendous output at the Gulf Coast -- about three times as much.

Money to -- by freight from the US Gulf Coast to New York filled up your Boston that it does to move it to itself America our -- Africa.

That's crazy and very quickly say midwest could be hit by -- high prices this spring.

Yeah I think the hot spot in the country will be the upper midwest and the Great Lakes we've got two of the biggest refineries in the country if not the world they're gonna be overlapping with.

Down time in April so watch out if you're at Chicago -- Milwaukee.

All right we've -- -- Tom close a Tom thank you so much appreciate it right here.

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