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Duquesne University Professor Kent Moors weighs in on the future of oil and gas prices in the United States.
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My next guest says there's no relief in sight for the pain at the -- -- -- and I says prices are headed back to the -- record levels -- July 20 08 when the average price for a gallon of regular gas reached.
A massive four dollars and eleven cents joining us now is any -- but for everything university.
Ten -- Blake missed a professor of -- I wish I had better news.
Why do you think we gonna see these prices move even higher.
Well there are number developments going on here and the first of course is the rising cost of crude oil.
Despite the fact that we are actually securing more of our crude oil domestically than we have -- years.
Especially because of the unconventional.
Shale and and -- oil.
Those oils are still more expensive to develop and their more expensive to process so those prices are adding to the cents.
That are added on to the gasoline that were buying at the retail level.
What it comes to the imports however.
The difference between the Brent price -- and the price for WTI in New York is once again expanding and when that spread expands.
It always results in refinery margins improvements in the United States put increased prices when it comes to the regional level.
So everywhere we look the prices are going to be going up.
We're also seeing a return of demand right now we're seeing -- -- of selective demand.
But as the real concern over another recession begins to subside in the United States we are going to see a rise in the demand and that demand will translate into an additional increase in price.
And then finally after remembered just around the corner.
Is the EPA mandated movement from winter to summer blend in gasoline and that summer bland is more expensive to put in your car.
What about the the C way pipeline we -- that up and running at full capacity will that have any impact.
If we have -- at full capacity it's actually likely to increase the price even more.
One of the basic reasons that has kept prices down in the United States aside from the overall demand considerations.
Has been a glut of crude oil at Cushing Oklahoma the principal pipeline interchange.
In the United States and actually were -- next determines its daily prices every day.
The C way.
Retrofit of the pipeline was designed to move more of that crude oil to refineries on the Gulf Coast.
And reduce that -- to the extent that that glut is reduced the price of oil -- oil products are likely to be increasing now.
We have realized over the last couple of days it's going to take C wait longer to get to its ultimate capacity than was originally anticipated but both C way.
And several new pipelines are coming on line between now and 2015.
And each time that that throughput increases to the Gulf Coast.
Were likely to see a marginal increase in gasoline prices.
Plus the refining capacity is not that great in this country so I guess that also adds to the pain that we see of the gas -- -- absolutely and there we have a decision over which.
Distillate -- is to be emphasized.
If we emphasized the light this fillets and hi octane gasoline we do that at the expense of low sulfur heating oil.
Jet fuel and diesel.
Which is why diesel is now almost permanently more expensive in the United States than it is for example proportionally in Europe where they produce more diesel than they produce gasoline so diesel prices are actually lower in Europe and gasoline has.
Being long on year ahead for the motorists out that thank you so much -- malls with Duquesne University thank you for joining us.
