Oil, gas prices should remain relatively steady
An OPEC agreement was reached today, and both oil and gas prices should remain stable for the the near future.
Jeremy Hobson: Now to the news from the Organization of Petroleum Exporting Countries -- also known as OPEC -- those countries agreed this morning to maintain global production at about 30 million barrels of oil per day.
For more on what that means for us, let's bring in Josh Brown of Fusion Analytics who is with us live from New York as he is every Wednesday. Hi Josh.
Josh Brown: Good morning.
Hobson: So what does this mean for oil prices -- and I guess, more importantly, gas prices here in the U.S.?
Brown: I think for oil prices it doesn't mean much. What they're really doing is just trying to make sure production normalizes once Libyan oil comes back online, because Saudi Arabia was doing a lot more pumping than normal to make up for that shortfall during the war.
For us, I think as long as crude oil stays below $100, prices at the pump should remain somewhat normative in this range. We shouldn't see too much in terms of spikes.
Hobson: Well, rising gas prices, of course, have been a problem in our economy for the past few years. When you look at all the big things happening in the global economy, how worried are you about gas prices eventually posing a problem for us?
Brown: I mean, eventually anything could be a problem. But I think if you look at a certain lovel of, let's say, $4.50 to $4.75 at the pump, that is the level at which there is empirical evidence that people start to change their habits -- people spend less, people adjust how much driving they're doing.
We're not quite in that range just yet -- we're not even approaching it -- so I think as long as the commodity supply-demand picture stays somewhat how it is, we shouldn't have to fear that just at this moment. We have plenty of other things to worry about, we can keep that one aside for now.
Hobson: Good to know. Josh Brown of Fusion Analytics, thanks as always.
Brown: Thank you.