Can We Expect Gas Prices to Increase Substantially this Summer?
Monday, April 27, 2009
Can we expect to see local gas prices increase in the next few months? What kind of factors are influencing gas prices right now? And, why are some oil companies stockpiling crude oil in off-shore supertankers? We speak to Charles Langley, with UCAN, about what's going on with gas prices nowadays.
Maureen Cavanaugh: Last year's high gas prices, and the world's economic recession have led to a dramatic decline in the demand for crude oil. In fact, there's a glut of crude in stockpiles now and the oil producing nations of OPEC have met three times in the past year, with the goal of cutting supplies. So far, most of those nations have not cut their supplies significantly - so the glut continues.
What can an a oil company do in a market like this? Well, it seems several oil companies and oil commodity trading firms have decided to store some assets until the prices go up. Shell Oil, Citigroup and other firms have reportedly hired supertankers to store millions of barrels of crude oil off shore. This, after defending themselves against allegations of price manipulation during last summer's gas price boom. An official at a global energy futures trading house says, "the fundamentals of supply and demand are only of interest to academics now."
Charles Langley, consumer gas price analyst for UCAN, the Utility Consumers Action Network.