- The Washington Times - Thursday, February 17, 2022

Inflation was already hurting Americans’ wallets at the gas pump. And now, the Ukraine crisis could drive those prices even higher.

Dan Dicker, a longtime oil and energy markets strategist, warns that gas prices could soar as high as $7, as the cost of crude oil continues to rise with a lack of global investment in supply and geopolitical tensions abroad.

“My guess is that you’re going to see $5 gas at any triple-digit [oil price], as soon as you get to $100. You might get to $6.50 or $7 at $120 or $130 [per barrel],” Mr. Dicker told Yahoo Finance Live. “Forget about $150 [per barrel], I don’t know where we’ll be then.”

Mr. Dicker, the founder of The Energy Word, said it’s hard to predict a timeline for such costs but that the price per barrel has already risen faster this year than he previously expected.

“This kind of fundamental growth in the oil market,” he said, “it’s hard to stop this train.”

The current national average for a gallon of regular gas was at $3.52 as of Thursday, according to AAA. That’s an increase of 16.5 cents per gallon from one month ago and 97.2 cents higher than one year ago, per GasBuddy. 

The price of WTI crude oil opened at $90.90 per barrel on Thursday, up more than 58% from $57.25 one year ago.

The saber rattling in Eastern Europe is only expected to make things worse. With a feared invasion of Ukraine by Russia, experts have sounded the alarm bells that such a geopolitical conflict would create ripple effects by further constraining supply from Russia’s oil production and thus shooting up prices further.

Russia is the world’s third-largest producer of petroleum and other liquids, according to the U.S. Energy Information Administration, producing an average of 10.5 million barrels per day. That’s about 10% of the global oil production.  

“The Ukraine dust-up has added fuel to the fire on energy prices,” Mr. Dicker said. But he added that Ukraine isn’t the reason why prices have already escalated so quickly over the past year. A lack of investment in supply is the main culprit, he said.

“What’s happened over the course of the last four or five years and even longer is a lot of supply destruction has gone on, where a lot of these producers can’t really respond to the increasing demands for oil,” Mr. Dicker said. “Right now, we’re not sure if anybody can supply any fresh supply into this market, no matter where prices go.”

• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.

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