If you think gas prices are already sky-high, brace yourself for a possible $7 per gallon rate later this year. According to an energy markets analyst, the price of fuel will continue to skyrocket if oil prices begin hitting $100 per barrel.
$7 Per Gallon Gas Prices Not Out of the Question
Energy Word founder Dan Dicker gave a warning to those reeling from high prices of gasoline. He said that Americans ain’t seen nothing yet.
Gas prices can hit $7 per gallon if the Russia-Ukraine tensions escalate. Prices will also surge once the weather gets warmer and demand rises as more Americans hit the road. “My guess is that you are going to see $5 a gallon” as soon as oil prices hit $100 per barrel.
Last Thursday, oil prices hit $92 a barrel. If oil supplies continue to spiral out of control, prices can exceed $150 a barrel.
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Dicker said that gas prices might hit $6.50 to $7 per gallon. Once oil prices exceed $150 per barrel, it would set a new record high for fossil fuels.
2008 Last Time Oil Was This Expensive
Analysts said that the last time crude oil was anywhere near this expensive was back in 2008. During that time, the world was reeling from a massive financial crisis. The price of a barrel of oil reached $147.
Consequently, gas prices went up to as much as $4.09 a gallon. As of February 17, the national gas price average is at $3.522, according to the Automobile Association of America.
Oil analysts reported that demand for oil continues to rise as the world emerges from its COVID hibernation.
However, the Organization of Petroleum Exporting Countries (OPEC), doesn’t indicate any plans to increase output. OPEC is the major group responsible for the world’s supply of oil.
Further Strain on Oil Supplies
The lack of OPEC plans to increase supply further complicates the current global situation. Russia and Ukraine are currently engaged in a dangerous game of blink.
Russian troops are currently massed at the border it shares with Ukraine. Intelligence reports coming from the West indicate that the former Soviet Union might invade its neighbor at some point.
If this happens, the West could place economic sanctions on Moscow. Any action affecting Russia can further strain oil supplies.
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Russia is the second-largest producer and exporter of petroleum in the world. It accounts for some 10% of global demand.
In addition, the country is also Europe’s largest supplier of natural gas. This is a critical resource for generating heat and electricity for many European countries.
While it does have the weight and the clout to have a say in the oil market, it remains an OPEC. Instead, it’s part of OPEC+, the group that includes both OPEC and non-OPEC countries.
Gas Prices In US Continue To Rise
The average price of gasoline at $3.52 per gallon is now 22 cents higher than it was a month ago. Compared to a year ago, gas prices are a dollar higher.
Unless OPEC increases the supply of crude oil, or if Russia and Ukraine defuse the tension, Americans should brace themselves. The summer of $7 per gallon gasoline prices can happen.
Watch the Washington Examiner video reporting that according to an oil expert, gas is heading for $7 a gallon:
Do you agree that gasoline prices can reach $7 per gallon later this year? What should America do to ensure enough oil supplies and lower gas prices?
Tell us what you think. Share your comments below.