Gas Prices Could Reach $6 this Summer

Gas prices…one of the most dreaded and fearful issues we have to deal with. On Monday, February 20, Iran made the decision to cut its exports to Britain and France. Iran’s cut led to an increase in oil prices, and when oil prices go up you know what that means, an increase in gas prices.

Iran sends out about 2.2 million barrels of oil a day, which represents only a tiny fraction of the total 89 million barrels that are sent out to the world. Only a fifth of its exports are exported to Europe. However, even a small exporter can cause a big change in market demand.

According to Fox 8 News, “U.S. crude for April delivery jumped about 2% to $105.28 per barrel. Brent crude, Europe’s benchmark, rose about 0.5% to $120.37 per barrel.” This year’s Presidents Day has seen the highest prices for gasoline and most likely we will be seeing a further rise in it.

Dan Dicker, author of “Oil’s Endless Bid” and oil trader, stated that the U.S. price for unleaded gasoline in the summer would most likely increase. There are some people who have even theorized that prices could go as high as $6 by the time the warm season starts. According to Forbes, “Consensus is that the current situation will result in prices over $4 by spring and any of the other possibilities, especially military action in the Middle East, could easily push gasoline prices to $6.”

The rise in gas prices could lead to stalling the already slow crawl of our economic recovery as people are forced to spend their money on gas to fill up their cars rather than on struggling businesses. “This price juggernaut has taken on a life of its own since the Iran/Israeli threat flinging began and [the] boycott/sanctions war continues to ratchet upwards, and it’s been made worse by the big run in stocks since the start of the year,” said Dicker.

Guess we shall see where this increase in gas prices will lead us and how it will affect our recuperating economy. It may be time to pump up those bicycle tires for work.

Photos courtesy of Ben Lunsford and Coolcaesar via WikiCommons.