$5 gas: Gas price of $5 per gallon being predicted as prices go higher, oil analyst disagrees

By on Mar 2, 2012 in Economy, United States Comments

A $5 gas price in the US is now being predicted to happen amid the tension in Iran and Syria as well as increasing demand from countries including China, but an oil analyst said that it is unlikely possible.

As noted at US news sites on Thursday, March 1, 2012, gasoline demand is increasing faster as summer approaches, with its price usually increasing up to around 20 cents a gallon but is now being predicted to have 50 cents price increase.

Apparently, AAA‘s Daily Fuel Gauge Report noted that US gas prices has an average of $3.72 per gallon since December last year, but some experts is now predicting that it could to reach $5 per gallon.

According to a report at New York Times on Wednesday, Strategic Energy and Economic Research president Michael C. Lynch said that “oil prices may push up 20 to 25 percent higher and another 50 cents a gallon at the pump” once the tension in Iran and Syria will escalate further.

The report noted that as of that day, the price of the benchmark American crude was settled at $107.07 a barrel, which is about $4 higher than on the same day in 2008; and oil experts predict a price hike of crude oil to as much as 20 percent given the situation in Iran.

However, Tom Kloza, chief oil analyst at the Oil Price Information Service, which provides research and investment information on the cost of oil, was quoted at Huffington Post on Thursday saying that the $5 gas is far from reality.

“No. No, no, no…$5 a gallon is an apocalyptic number … It’s not going to happen.” Kloza was quoted on the report, noting that in most cases, it’s money managers trading in oil futures who drive up gas prices.

On the other hand, CNN‘s Jack Cafferty, while speaking on “The Situation Room,” was quoted saying that if some experts are predicting $5 gas this summer, it may have a strong impact on President Barack Obama‘s re-election campaign and could be an advantage for the GOP party.

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