Gas prices: 'The solution here, unfortunately, is probably a recession,' analyst says

[mahatmakanejeeves]

Yahoo Finance

Gas prices: ‘The solution here, unfortunately, is probably a recession,’ analyst says

Ines Ferré · Markets Reporter
Thu, June 16, 2022, 6:23 AM

Gasoline prices remain above an average of $5/gallon nationally, according to AAA data, and energy experts still do not see any relief in sight. ... "We’re likely to get record highs on U.S. regular gasoline this summer, when demand typically peaks,” Stewart Glickman, energy equity analyst at CFRA Research, told Yahoo Finance. “Best guess, we peak around $5.50/gallon during the summer.”

Citing refining capacity, he added: “If we’re going to get US gasoline prices to fall, it’s probably not going to be a supply-driven solution. The solution here, unfortunately, is probably a recession that kills demand and reduces scarcity of supply."

Consumers are already showing the first signs of slipping demand and may be wondering how much more they can handles as essentials like groceries also rise amid elevated inflation.

“I think gasoline prices will remain elevated throughout summer" — meaning the $5.00-$5.50 range — "based on strong demand during summer driving season in the US, low inventories, and refining constraints,” Rebecca Babin, senior equity trader for CIBC Private Wealth, told Yahoo Finance.

{snip}