Truth on High Gas Prices
By: Mycah Glover
Updated: March 29, 2012
MIDLAND -- With the presidential election in full swing, high gasoline prices are at the center of political debate.
It has a lot of people questioning why gasoline prices are so high. There have been a lot recent reports speculating as to why gas prices are so high, especially since the summer months aren't even here yet.
Financial expert Mickey Cargile separates fact from fiction.
"There's really three reasons. One is there's a concern that supply will be disrupted because of what's going on in the Middle East," says Cargile, founder of Cargile Investment Management. He says that has caused oil prices to go up artificially by $10 or $20 a barrel.
Cargile also says there's a problem with refineries.
"Refineries keep shutting down simply because they can't make a profit and that's driving up the cost of gasoline because, again, there may be a disruption of supply," he said.
He says the third reason is simply seasonal.
"This is the time of year when refineries switch from making heating oil to gasoline for summer driving season," he said.
In order for gas prices to go down, Cargile says, "Probably the most important thing is getting rid of the fear that the Middle Eastern situation will disrupt supply. That's the most important thing. We also need more drilling and we're seeing that. We're seeing the additional supplies come online."
Many analysts predict we could see $5 gasoline this year. Cargile says that's not out of the realm of possibility, but he expects we'll see the highest price of the year as we go into Memorial Day. After that, he believes prices should decline.
It has a lot of people questioning why gasoline prices are so high. There have been a lot recent reports speculating as to why gas prices are so high, especially since the summer months aren't even here yet.
Financial expert Mickey Cargile separates fact from fiction.
"There's really three reasons. One is there's a concern that supply will be disrupted because of what's going on in the Middle East," says Cargile, founder of Cargile Investment Management. He says that has caused oil prices to go up artificially by $10 or $20 a barrel.
Cargile also says there's a problem with refineries.
"Refineries keep shutting down simply because they can't make a profit and that's driving up the cost of gasoline because, again, there may be a disruption of supply," he said.
He says the third reason is simply seasonal.
"This is the time of year when refineries switch from making heating oil to gasoline for summer driving season," he said.
In order for gas prices to go down, Cargile says, "Probably the most important thing is getting rid of the fear that the Middle Eastern situation will disrupt supply. That's the most important thing. We also need more drilling and we're seeing that. We're seeing the additional supplies come online."
Many analysts predict we could see $5 gasoline this year. Cargile says that's not out of the realm of possibility, but he expects we'll see the highest price of the year as we go into Memorial Day. After that, he believes prices should decline.
