SCSU’s Banaian; Where Gas Prices are Going and Possible Recession
Gas prices are on the rise but where will they peak? St. Cloud State Dean, School of Public Affairs and Economics Professor King Banaian joined me on WJON. He says due to Sauk Arabia announcing that they will extend their voluntary production cuts of 1 million barrels per day through the end of the year. Banaian explains another factor is 8 coups happening in African countries since 2020. He says the country of Gabon in Central Africa produces oil and because of a recent coup that oil won't likely be available which decreases the world's supply and drives up the price of oil.
Due to these challenges Banaian says prices are already on the rise and that will likely push the price of gas up to the $3.70 mark if not beyond within the next couple of months. He wouldn't rule out $4 a gallon gas before the year is done. The switch from summer blend to winter blend of gas will take place in early November which always pushes the price of gas up a bit. Banaian sees this gas price increase as a limited increase that won't last.
Recession is still on the radar of economists throughout the world. Banaian believes a recession is likely to happen in the United States near the end of this year. He explains many in the United States don't expect a recession but Saudi Arabia thinks it will happen and so does Banaian. He says retail sales have been good but people are running out of savings and charging more to their credit cards. Banaian believes interest rates are stable which often means the next step is recession. He says a recession can still happen with an unemployment rate at 4% but it is rare. If you'd like to listen to my conversation with King Banaian it is available below.