SCSU’s Banaian Doesn’t Believe Gas Prices Will Change Much
Despite the news of OPEC reducing oil production St. Cloud State Economist and Dean, School of Public Affairs, King Banaian doesn't believe gas prices will move much up or down anytime soon. Banaian joined me on WJON today. He says with Saudi Arabia cutting production someone else will increase production and fill that void. Banaian believes Russia could be the country that increases production to help fund their war effort. He says Russia is the most likely country to do this but there are others who may do this which could include IRAN and Nigeria. Banaian acknowledges if no country steps up production the price of gas in the U.S. would rise.
Banaian says the oil market is a global market which means if the price is $78 a barrel in the U.S. that is the price throughout the world. He says that price is affected by oil production throughout the world regardless of where the oil is purchased. Banaian indicates the last 3 Presidential administrations has sold oil from the United States to oversees interests. He says he has no evidence that there is a significant change in supply that would change where prices are headed aside from the decision made by Saudi Arabia this weekend.
The global economy is slowing down according to Banaian. He still feels that a recession is likely to come but we may not know that a recession has happened until it is behind us. Banaian indicates he is less certain that a recession will happen or is happening during the 2nd quarter based on 1st quarter GDP numbers and the job report. He says it is looking like 2nd quarter GDP will come in above zero.
Banaian says this economy at the time being is looking resilient with people continuing to travel and spend money. He says manufacturing isn't having as good of year in 2023 as it did in 2022.
If you'd like to listen to my conversation with King Banaian it is available below.