Energy and Capital's Siegel: Don't Expect Cheaper Gas This Fall

Friday, 23 Aug 2013 10:55 AM

By Michelle Smith and Kathleen Walter

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September generally brings an end to higher summer gas prices, but motorists shouldn't look for autumn savings this year, says Jeff Siegel, managing editor of Energy and Capital.

September usually initiates a predictable course of events — the summer driving season ends, refiners start switching to cheaper winter-grade gasoline by mid-month and drivers start seeing lower prices at the pump.

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Also, seemingly in motorists favor this year are declines in oil prices driven by traders booking profits due to fears that the Federal Reserve will taper its stimulus programs.

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But, according to Siegel, market conditions are not typical and people should not expect cheaper gas anytime soon.

"The price of oil is not going to relent much going into the fall and that could kind of put the kibosh on consumers having the ability to jump on some cheaper gas prices," he told Newsmax TV in an exclusive interview.

"You're still going to have the effect of what's going on in the Middle East really affecting oil prices. That's really going to be a big indicator there," Siegel, a contributing analyst for the Energy Investor, noted.

Unless there's a significant escalation in violence and supply is choked off, some analysts are still looking for gas prices to fall. But Siegel believes the ongoing conflict is enough to prevent that from happening.

"I personally don't see the Syria situation getting much better. I don't see the Egypt situation getting much better. I don't think there's any real threat of any closings of the Suez or anything like that. But just the uptick in violence and the consistency of it is really going to pressure oil prices. You have to remember it's a global market," he said.

"So despite any increases we may see domestically, it's not going to have an impact on the global price."

People may be disappointed when gas prices don't fall, but at least they will not face price increases, according to Siegel's projections.

"I don't think they're going to move much from where they are now," he declared.

But if prices did shoot up, even to $5 per gallon, Siegel does not think it would push American households to the breaking point.

Although $5 per gallon gas would force some households to make sacrifices, according to Siegel, they won't stop buying gas. Instead, people will give up something like cable.

"People got really freaked out when we saw $4 gas. We adapted pretty quickly to that. It's the lifeline of our economy — people have to get to work, they have to get to school," Siegel proclaimed.

"It's just a matter of adapting to reality," he added.

Siegel doesn't think natural gas prices will move much either.

"Natural gas is still dirt cheap. I personally have heavily invested in natural gas," he declared.

"I'm very bullish on the infrastructure stocks right now — pipelines, any possibilities of LNG [liquified natural gas] exports. I'm pretty bullish on as far as the producers. I've been following those for many years, but most investors are looking at the infrastructure plays right now and that's where they should be."

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