And at $6 per gallon, US consumers will not only experience a touch of Europe without leaving the comforts of their own homes, the drain on another flat-lined metric—household income—could inject additional life to the anti-Obama tide of disenchantment this election cycle.
“March is now on the way, and we are seeing very high prices for gasoline at the pump,” Leeb told King World News. “ . . . we are continuing to see higher prices for gasoline and it may even hit record highs. In fact, I think they will hit record highs and we will see a minimum of $6 per gallon gasoline in the United States this summer.”
As geopolitical tensions between the West and Iran reach fresh highs, some in the business of managing money reckon that soon the oil price (NYSEArca:USO) could reach fresh highs as well, with the added help of a runaway printing press operator at the helm of the Fed, Ben Bernanke.
One 40-year money manager veteran Robert Fitzwilson, founder of Portola Group, anticipates the possibility of oil trading up from the present $80 to $100 range, to a new range, above the record price of $147 per barrel, set during the summer of 2008.
Along with Leeb, Fitzwilson believes the proverbial ‘perfect storm’ between two reliable catalysts for higher oil prices are about to clash hard this year. Those catalysts include a Middle East war (this time with Iran) and the Fed’s unofficial policy of encouraging sidelined money to take on risk at near-zero borrowing costs.
“Regardless, the secular forces almost ensure that the price of energy is going higher,” Fitzwilson told Eric King of KWN. “With this [ultra-loose monetary policy] as a backdrop, we have the Fed mandating that they are going to try to get the stock market higher and improve the economy by printing money. You can’t have that happen without demand for oil increasing.
“So, both from a monetary perspective and a supply/demand perspective, the price of oil has to go higher and has to go higher in a substantial way. $170 to $250 a barrel oil would not surprise me.”
