Photo: Flickr / Jason Drury
After an early-summer slump, gas prices have quietly climbed to a national average of $3.75. Stephen Schork believes this is likely to prompt President Obama to tap the country’s strategic oil reserves.
He told Yahoo there is a better than 50 per cent chance of the White House pulling that trigger.
“Will [tapping strategic reserves] matter? From a fundamentals standpoint, no it will not. There is plenty of crude oil for motorists here in the United States. That’s not the issue at this point. It would be purely politically driven.
“Be that as it may, right now, with Americans paying potentially $4 gallon, that is a $0.50 more in September than over the 4th of July holiday, and a $1.50 more than four years ago.”
So why have prices climbed, and why would tapping reserves not help?
Schork says maintenance issues at refineries in the North Sea, along with Israel-Iran tensions, have caused Brent crude prices to rise.
If Obama does not tap the reserves, it may be because the price will have fallen again.
However, Schork says if prices did hit $4.00, the consumer will get crushed.
“The U.S. economy cannot sustain $4.00 gas prices,” he said.