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The average price of gas may tick up almost 10%: Prosper Trading Academy CEO

Scott Bauer, Prosper Trading Academy CEO, joins Yahoo Finance to discuss supply issues for the oil market, gas prices, the potential spread of Europe’s energy crisis, domestic policy on oil drilling, and the natural gas market.

Video transcript

ALEXIS CHRISTOFOROUS: And that's those gas station pumps running dry in major cities and in Britain today. A lot of vendors now rationing sales, as a shortage of truckers strain the supply chains to the breaking point. Joining us now is Scott Bauer, CEO of Prosper Trading Academy. So, Scott, tell us if what we're seeing play out in Britain right now, is it possible we can see that happening on our shores here at our gas stations?

SCOTT BAUER: Listen, anything is possible, though I do think that they're getting hit a bit harder than we will be here. I mean, we've weathered the storm-- no pun intended-- I'm not making light of this-- of the hurricanes. Yes, is there a shortage right now? Yes. Is demand picking up? Yes.

I don't see it getting to the point where Britain-- where Europe is right now. I mean, they're at 10-year stockpile lows right now. So they're really getting it from all ends. Can we see some shortages going into the winter months here? I don't really see it. Is there still going to be upward pressure? Yeah, that there probably will be. And I'm talking about prices.

JARED BLIKRE: Scott, great to see you. I want to ask you what your views are on the domestic policy front with regard to oil drilling. We know that Biden has come out, enacted measures or tried to promote measures that would curtail federal drilling, at least new drilling, in federal lands and other such measures.

But then you combine that with the fact that recently, he was complaining to OPEC Plus about higher-- or oil prices that are too high. I'm just wondering if there's a medium. Is there a price at which oil prices get so high that we start drilling and start allowing federal lands to be drilled on again and some of the other measures that have been curtailed by the Biden administration? Or do you think that's just verboten?

SCOTT BAUER: You know, I think we're almost there, quite frankly. I don't think that oil has to go much higher, but it has to sustain this level probably for another good six months or so. I mean, obviously, if we did see oil at $90 to $100 a barrel, that is a game changer. It really is. It's a psychological number that nobody wants to see. But I really think we're there right now. And again, we need to see if it sustains itself here for the next six months or so.

Where I think that this could really be a problem for the administration is in the green energy, in the Green-- you know, Green Deal, because the more-- the longer and longer that prices remain up here, the more there's going to be a call for actually going out and resourcing more crude, bottom line. And I think that could really put a damper on the prospects of any sort of new Green Deal.

ALEXIS CHRISTOFOROUS: I want to get back to gas prices for a moment because you said that, you know, we might not see the shortages that Britain is experiencing right now, but we could certainly see prices move up. Right now, current national average cost of gas, $3.19. That's 44% higher than this time last year, but of course, nowhere near the record we saw when we topped $4 a barrel back in 2008. So where do you see gas prices and crude prices by the end of the year?

SCOTT BAUER: So I think Goldman Sachs has called this morning. That's not really a big deal, I don't think. You know, we're talking about a little over, what, 10%, 12% higher here. If they were to call it for $100, $110 a barrel, now you're talking something. I do think that we can hit that $80 a barrel. I don't think we're going to be much higher that, but-- than that by the end of the year. Maybe we see the average price of gas tick up to 3.30, 3.40, maybe almost 10% from here. I honestly don't see it ticking up that much higher than that.

JARED BLIKRE: Scott, I want to talk about the natural gas market because that's another area that I was just briefly talking about before that's feeling the pinch. They call it the oil maker for a reason. It's been on a tear. It pulled back. It looks like it's advancing again. This is a problem for Europeans. First of all, could it spread to the US? I know we have our own domestic supply-- maybe not so much of a concern. But does this reverberate throughout the world as well?

SCOTT BAUER: Well, absolutely, and I think this is really where the problem is, is in the natural gas space because you've got a lot of factors working against this whole space right now. You've got a big, big, huge demand. You've got a curtailing of supply. You've got Russia coming in there, at least right now, holding the cards, saying, yeah, we're going to hold back a little bit here and maybe make everybody else pay up.

But where I really see this as a problem that can be a global problem is, these prices start going up or keep going up here. And that trickles down. That trickles down to fertilizer companies. It trickles down to the farmers. It trickles down to all sorts of prices having to elevate from here. And I think that is the big worry in not just in Europe, but globally. So I think that is a big concern.

In terms of the supply of natural gas here, I'm kind of in the same camp as I am with gasoline, is, you know, maybe we see prices tick up a bit higher from here. I don't think there's going to be a supply crunch. However, that trickle-down effect into really what they can do into food prices, bottom line here, that, to me, is the biggest problem at hand.

JARED BLIKRE: Well, since you mentioned food prices here, I just want to get your take on the grains because we saw beans in the teens recently, but the grains have really fallen off. I'm just wondering, do you expect them to maybe reaccelerate into the end of the year? I mean, that's all because of the, quite frankly, the mild weather we've had. We've had some rains early on. The weather's been great for that.

So I'm not sure what the weather forecast is going into the end of the year. I'm here in the Midwest. The weather has been phenomenal. We get through some of the storms that we've had recently. And it looks like things could hopefully stay status quo, where, at least in that sector in the commodity space-- grains, beans, corn-- hopefully, we don't get that pressure as well.

ALEXIS CHRISTOFOROUS: All right, Scott Bauer, CEO of Prosper Trading Academy, always good to see you. Thanks so much.