Will Mideast chaos spike gas prices at home?
Fears that violence abroad could have US economy running on empty
- Duration 8:25
- Date Sep 15, 2012
Fears that violence abroad could have US economy running on empty
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Violent anti American riots in oil rich regions of the middle east of northern Africa.
Fueling fears gas prices could spike even higher in the US.
They're already at record highs for this time of the year so just how bad could this get for drivers and for our economy.
Hi everyone I'm Brenda -- and this is Bulls and Bears fans here they -- the Bulls and Bears this week.
Gary B Smith Tobin Smith Jonas Max -- Along with Todd Jones murder and Steve Murphy welcome everybody okay -- we -- gas prices jumped during the Arab Spring last year.
How bad is this gonna get now.
It's gonna get horrible right now -- -- and I tell you why first of all like you said the top we're already at a record high for this time of the year.
Then you start talking about the violence that's taken place in Libya also some other oil based countries right now and you have -- -- -- that this is going to spread this is gonna continue to move higher and this is something the US economy cannot afford right now.
Good to look at a higher prices at the -- -- less money to go out and.
Spend -- -- -- we are seeing that supply could drive this higher but didn't and might bring it down the economy's in trouble around the world.
Yes absolutely first of all.
Supply has not.
Been disrupted it's not likely to be disrupted.
And the gulf states Saudi Arabia especially the emirates are pumping oil like crazy because they want us to stand up to Iran.
Secondly demand goes down in the fall.
It always does gas prices are a little bit high for this exact point in the year.
But we know what the trend line is and it's gonna go down in the fall this is not the biggest threat.
Through our economy it is the softening demand and the downturn in Europe and emerging economies.
I'll I'll take Toby do you agree that.
Well I do want to point what is obviously we know from six months ago that the cure for high gasoline prices are oil prices is high oil prices.
We're on on this part.
Where the -- -- have separated from fear there is no question there's a higher fear premium.
I but I sort of ask Americans and people around the world to look at this -- -- you know with the context.
Don't let these guys ski area.
I mean yes it's fearful this this film we're seeing is fearful.
But the fact is that and we are in a slower economy we are using about six and a half percent less oil and gasoline this time this year that we did two years ago.
I wouldn't change my behavior I wouldn't worry and fret about our economy follow the clip.
Because you know this is a a news cycle and these guys are going to be you know out of bombs and bullets here about the next 45 days.
But that theory being is our -- did in two days there's no telling how long it -- god.
Exactly trying to look there's there's two issues you know -- -- pointed out that gas prices are primarily.
It for the short term driven by emotions as the futures us what you say you saw during.
The Arab Spring gas prices rose almost 30%.
But the other point is that the supply and demand and as -- points out it's not disrupted right now in the emirates and Saudi Arabia.
But here's the problem you remember back to the beginning of the financial crisis I know I for -- one thought -- it'll just be limited.
They're just a few banks and -- -- -- it's steamrolled until it hit.
The entire financial sector that's the concern here that's what I think.
Todd is alluding to ensure damage just contain today -- the yemen's that the world.
Yes they did that won't be an impact on the supply demand if this spreads and this -- kind of viral thing that could spread.
That we will have serious problems a -- is that really is the question what if this Brad.
Well most of the world's really get a more reserves horror.
If you're around people that doesn't do not take much -- a reason to get into a huge anti American phrase immediately decoys can happen it's always been like that it's by getting worse but the bottom line.
Is it these countries have no real economies but selling oil.
And they want to get that all of the market and this these colors are -- largely run -- -- and dictators because that's the best way to get the oil out of the country people like that who don't like Americans.
And they will shoot people who try to blow -- for structure and building jails and prisons and all the crazy stuff it's obvious to do and everybody else so.
-- the governments are overgrown.
I don't see any risk of major oil infrastructure not hitting the in the market essentially that is a possible.
It not be more right and let's not forget that that in many of these countries.
The oil numbers are not hitting the point here -- near the public access oil be with for now we have about 300 days of excess oil in storage.
I just think we're jumping the gun here.
I don't know -- -- under the -- they pulled that trigger tide and that.
I tell you so big -- -- certain I need to think this is just a couple of days of this unrest.
This is going to continue you know Jonas talks about government's been a return they have been -- -- guys and look you still have to democracy issues that are not taken place there.
So here you talk about oil rich countries -- they gonna get it out to the marketplace look I gotta tell you something in a twisted kind of way this is kind of an enviable business model.
You have these oil rich countries and they start doing all -- -- -- -- the -- It raises prices of oil going higher and that increases are royalty revenue for those countries that and I cannot see this -- stop and anytime soon in the rest is just gonna area ever.
Well I think I don't know -- you crystal ball here.
We will make it a good judgment here -- some lunatic fringe.
If you look at the I haven't seen anybody under the age of over the 825 and -- -- people have been murdered and I understand that that's what I would call lunatic friend in.
What we have adjustments -- best part of -- But this is letting I've seen this is some ideology -- -- -- but the -- -- after the oil I guarantee you would see a hail of bullets like you haven't seen since deep yet.
It's a -- -- did these people -- aren't.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- To go out I don't want to structures not like they can go -- while the Exxon not refinery in Iran it was taken over already and that's the bottom line so it -- to get a lot more now internal guys are just before our government.
Genesis and its proxy Neil's -- started smog and then you start thinking about.
Other big countries are your brand is a big threat right now and -- this -- -- with Syria Israel I read.
Can you imagine the gas prices are gonna be at that point lead double where they are right now Kerry beat.
Well you know -- talk about a crystal ball but I don't think the crystal balls any clear on the side of what Jonas -- -- are saying all of the you know this is just as small thing it's a last the couple days you know right now we have flare ups in the middle please say you gotta say wow could this continue what we got some flare ups that could discontinued I would say the odds are that it is going.
To continue rather than just love ordinary Atlanta's -- But he's yes I understand that but you have to -- you have to take the events as they are now and -- is this gonna die off.
Well maybe maybe not that's all I'm saying couldn't continue to -- does continue.
We've seen -- spike in the volatility in the oil futures right now that keeps going up gas prices are going to go up.
What lies that we had this type of -- outside the Arab Spring but let's go back far -- the history -- -- we were actually importing you know in the United States 1617.
Million barrels of -- we're down down to nine million -- we now actually export petroleum and -- diesel the old -- things to other countries were not in the same position I don't think it's analogous.
It to take this and extrapolate this over in our team -- It's all -- all I'm saying is that you have to suck you just can't it can't say the threat level is zero it has to be something that's why we've seen despite the last few days this past weekend oil price.
And -- it's not necessarily.
What the protesters want is to give the government more revenue -- -- Do you get that right don't think they're that Smart -- But looked anti American sentiment is right there.
They hate us they've always hated us and this is just going to continue to move it forward.
Look the exact -- -- gas prices are gone through the -- as it is guy's Robert if that record high level right need to talk about supply demand concerns are you want.
But bottom line is once you start cutting off that supply guys eventually those numbers crisscross gas prices -- may have -- higher okay that's got to be the last.