Oil prices are rising this morning as summer gasoline prices continue to bode ill for consumers. In many parts of the United States, gasoline prices are well above $5/gallon as reported in Monday’s edition of FUELSNews Daily. With prices continuing their trend upward, many are saying that oil will reach a $150/bbl mark.
This week Goldman Sachs said that this summer, retail gasoline prices must reach levels of $150-160 to help curb the menacing demand facing the United States. While strategists believe this is still a possibility for oil prices, there is still the unknown. The main thought from the investment group is that the worst is still yet to come for consumers, as once again on Tuesday gasoline reached a new record of $4.92/gallon. “We believe oil prices need to rally further to normalize the unsustainably low levels of global oil inventories, as well as OPEC and refining spare capacities,” Goldman Sachs strategists wrote.
There is some good news in all of this. The EIA has continually expected $4/gallon gasoline to be normality through 2023, as opposed to the $5/gallon many are seeing now. They have remained adamant that, on average, consumers should see gasoline hovering around the $3.87 mark in the last three months of the year. The main problem now lies with low inventory levels and refinery production that could change forecasts in the future.