Banaian: This is Why Gas Prices Continue to Drop
Gas prices have been on a steady decline in Central Minnesota and throughout the country for the last few months. St. Cloud State Dean, School of Public Affairs and Economics professor King Banaian joined me on WJON. He says the reason for this trend is the demand for gas just isn't there. He says we are at the point where OPEC, after they were asked to produce more oil, have now cut the oil production limit by 100,000 barrels per day because they are saying there just isn't demand. Banaian says these lower prices are probably going to stick around for awhile but he doesn't see them dropping much more.
Banaian says gas prices in Europe continue to be on the rise while we see them fall here. He says Europe's inflation is actually higher than what we have here in the United States. Banaian says Germany is in a recession right now and he suspects China is too. He says the United States still isn't in a recession but one could be coming because it would be difficult to see many other counties go into a recession while we don't this time.
Energy or lack there of continues to impact part of the United States. Banaian says California was very close this week to telling their residents they would be shutting off their power to protect the grid. They didn't have to but warning signs were given. He says shortages of energy in California and in the southwestern states does impact us. Banaian explains this impacts us because eventually our energy prices will depend on theirs. He says the heat wave in California is driving up energy prices. Banaian says it is expensive for California to produce natural gas and energy right now and that will get transferred into the system.
If you'd like to listen to my conversation with King Banaian it is available below.