Gas prices will probably go up this summer
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What is the main topic discussed in this episode?
Olen Shannon Maldonado, käsintehtyjä artesaanituotteita myyvän Jaui lahjakaupan perustaja. Valitsin Shopify, koska alustoja testatessani totesin sen ehdottomasti yhdeksi helppokäyttöisimmistä alustoista. Minulla oli tärkeää pohtia kehittymistämme tulevaisuudessa. Kaikki myyntiin tarvittavat työkalut, kuten varaston suunnittelu, ovat kätevästi dashboardissa. Aloita ilmainen kokeilu shopify.com-sivustolla.
I don't want to alarm anybody, but have you seen prices lately? From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Thursday today. This one is the 11th of June. Good as it always is to have you along, everybody. So here's what's happened in the oil markets the past couple of days. There was talk of a peace agreement in the war and oil prices went down. Then there was shooting and oil prices went down. Then there was a president saying he was going to bomb Iran hard and oil prices went down. And then the president said the bombing is off and... Here we are. Oil prices are down. Part of why is that the United States has been drawing down its commercial and strategic oil reserves.
Crude inventories fell another 7.2 million barrels this week. That brings the drawdown, Reuters says, to almost 80 million barrels since the war started. There are, yes, still hundreds of millions of barrels left, but inventories can only get so low before the supply chain starts to break down. Traders might not care about the geopolitics, but they are sure going to care about the logistics. Marketplace's Kaylee Wells gets us going.
Out of all those barrels in our oil inventories, a lot of them just aren't accessible.
You think about a large storage tank, there's always going to be some oil at the bottom that can't be pumped out.
Aaron Brady with S&P Global Energy says there's also the oil that keeps pipes lubricated and storage caverns safely intact. So he estimates that roughly 290 million of the 426 million barrels of oil now in the U.S. inventory won't actually get used or sold. And at the current drawdown rate?
Why are gas prices expected to rise this summer?
Sometime in July is my best guess is when we get into that danger zone where we get close to those minimum operating levels.
And even if the war ended today, it takes a couple months to get the global supply chain back up and running normally.
The hardest part, I think, is that it does not feel like we're close to a situation where things start to move back toward normal.
Dan Pickering is founder and chief investment officer of Pickering Energy Partners. And he says as countries deplete their reserves, oil prices have been deceptively not bad. Folks are like, what do I need to worry about?
The issue is every single day that market's tightening. And when you get to the point where it's obvious that there's an issue, it's very hard to fix.
Now, the U.S. is in a very different position than it was the last time it was flirting with oil supply problems in the 1970s, says Hugh Daigle, professor of petroleum engineering at the University of Texas at Austin.
When you had things like big lines of gas stations, gasoline rationing, reduction of national speed limits to 55 miles an hour, I mean, those are pretty drastic measures.
Today, he says it's more of a slow-moving crisis, and the main threat to consumers is a drastic change in price.
As we keep drawing down the reserve, you're really limiting your ability to further control the prices that people are paying for refined products.
Which is why all three analysts say oil prices will rise this summer. Dan Pickering says it could go up anywhere from 20 to 50 percent higher. I'm Kaylee Wells for Marketplace.
Wall Street on this Thursday. Tell you what, equities traders sure did like the geopolitical news of the day. We will have the details when we do the numbers.
The thing about this economy right now is that we are borrowing a lot of money, like way more than we have in the past. So the Treasury Department has been auctioning off a lot of long-term government debt this week, 30-year bonds today, about 10 years on Wednesday, which means we know what yield, which is to say what interest rate investors are demanding in exchange for lending the government money for years or even decades.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–2:19
2
Why are gas prices expected to rise this summer?
2:19–7:01
3
What impact does the war in Iran have on oil reserves?
7:01–8:53
4
How do U.S. oil inventories affect gas prices?
8:53–19:04
5
What are the predictions for oil price increases?
19:04–22:13
6
How are bond investors reacting to inflation concerns?
22:13–27:02