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Biden’s ban on Russian imports means $150 per barrel of oil, a $5 gallon of gas or higher, and a 1 in 3 recession risk: Moody’s

 
 
Mark Zandi
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Win McNamee—Getty Images
Will Daniel
Tue, March 8, 2022, 2:58 PM CST
 
 
 
Mark Zandi
Economist
 
 

Russia’s invasion of Ukraine could mean oil prices as high as $150 per barrel and a one in three risk of recession in the U.S., Moody’s Analytics chief economist Mark Zandi said on Tuesday.

“It’s a big surprise to me that the U.S. and others are self-sanctioning Russian oil. Over 3 million barrels a day of Russian oil needs to be replaced, fast,” Zandi said. “The Saudis and UAE have excess capacity, and there is Iranian oil. U.S. frackers will kick in. But all this will take time.”

If his prediction is correct, oil’s rise could mean sustained gas prices above $5 a gallon in the U.S., the economist noted. That coupled with a nearly 5 percentage point jump in the risk of recession from December’s 27.8% figure has Zandi worried.

In a speech this morning announcing a ban on Russian oil imports, President Biden warned Americans of higher prices ahead as well. “With this action, it (oil) is going to go up further,” he said, calling the rising gas prices "Putin's price hike.”

“Russia’s aggression has cost us all, and it’s no time for profiteering or price gouging,” the president added in a warning to gas stations seeking to profit off of the announcement.

 

Zandi, who had predicted inflation would fall if COVID-19 continued its retreat back in late 2021, changed his tune on the threat of rising consumer prices this week, arguing darker days are ahead. Inflation expectations threaten “to become unhinged” after Russia’s invasion of Ukraine, he said.

The Moody's economist pointed to the 5-year breakeven inflation rate, a measure of what market participants expect inflation to be in the next five years, as evidence for his claim after the figure hit a record high of 3.29% on Monday.

Zandi wasn’t the only energy market expert predicting $150 per barrel oil on Tuesday, either. Occidental Petroleum Corp.’s CEO Vicki Hollub said she sees Brent crude oil prices, the international benchmark, rising to $150 per barrel as the Russian invasion of Ukraine continues.

David Rundell, who served as an American diplomat for 30 years in the Middle East, previously told Fortune that the deteriorating state of diplomatic affairs with Saudi leaders is only adding to the gloomy story for U.S. energy costs. The diplomat went even further than Zandi with a prediction that $6 per gallon gas could be in the cards for U.S. consumers over the coming year as geopolitical tensions mount.

This story was originally featured on Fortune.com

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6 minutes ago, Jimmy Snacks said:

We’ve always bought oil.

I know, but why now when we have our own and plenty of it, oh wait!

 

Mar. 8—The Biden administration has been caught with its pants down on energy policy as the war in Ukraine has put a new and much more favorable light on American production, energy spokesmen say.

Having spent the past year trying to slow down new oil and natural gas leasing on federal lands, halting construction on the Keystone XL Pipeline from Canada and in other ways impeding production, the administration finds itself faced with the newly controversial American dependence on Russian oil and the sudden urgency to ramp up production, the spokesmen say.

Edited by XCR1250
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8 minutes ago, XCR1250 said:

I know, but why now when we have our own and plenty of it, oh wait!

 

Mar. 8—The Biden administration has been caught with its pants down on energy policy as the war in Ukraine has put a new and much more favorable light on American production, energy spokesmen say.

Having spent the past year trying to slow down new oil and natural gas leasing on federal lands, halting construction on the Keystone XL Pipeline from Canada and in other ways impeding production, the administration finds itself faced with the newly controversial American dependence on Russian oil and the sudden urgency to ramp up production, the spokesmen say.

Leave Keystone XL out of it...it has nothing to do with current prices. Also we aren’t “dependent” on Russian Oil but you do realize we were still buying it even during Trumps so called “energy independence” years right? 
BTW how do you tell oil companies  where they can sell their product? 

Edited by Jimmy Snacks
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4 minutes ago, Jimmy Snacks said:

Leave Keystone XL out of it...it has nothing to do with current prices. Also we aren’t “dependent” on Russian Oil but you do realize we were still buying it even during Trumps so called “energy independence” years right? 
BTW how do you tell oil companies  where they can sell their product? 

Oh, I get it, gas prices now are Trump's fault..LOL

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8 minutes ago, XCR1250 said:

Oh, I get it, gas prices now are Trump's fault..LOL

I didn’t say that did I Don...just pointing it out because many people don’t know that...good read about the current oil situation.

 

https://www.npr.org/sections/money/2022/03/01/1083415798/how-a-wrinkle-in-the-oil-futures-market-has-clogged-americas-oil-pump

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40 minutes ago, Jimmy Snacks said:

I didn’t say that did I Don...just pointing it out because many people don’t know that...good read about the current oil situation.

 

https://www.npr.org/sections/money/2022/03/01/1083415798/how-a-wrinkle-in-the-oil-futures-market-has-clogged-americas-oil-pump

Yup - the climate activists have created such negative pressure on the oil companies, the big push for green energy that is no where near ready to handle the demand, with too many countries in the world that bought into the Greta effect of climate change, and here we are.  
Throw in a plandemic and a war and it escalates like it is now.

Edited by Mag6240
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20 hours ago, ford_428cj said:

Who's going to read snacks liberal trash articles? 

 

2 minutes ago, Angry ginger said:

always better to just read from RWW sites like barenaked islam than NPR

It’s why he’s such an ignorant hilljack.

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22 hours ago, Mag6240 said:

Yup - the climate activists have created such negative pressure on the oil companies, the big push for green energy that is no where near ready to handle the demand, with too many countries in the world that bought into the Greta effect of climate change, and here we are.  
Throw in a plandemic and a war and it escalates like it is now.

The oil companies have lobbied and lied to destroy renewable energy. They spend a fortune buying republican politicians to make it happen. 

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1 hour ago, spin_dry said:

The oil companies have lobbied and lied to destroy renewable energy. They spend a fortune buying republican politicians to make it happen. 

Weird, they are making a killing now in the face of it. 

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Just now, spin_dry said:

Obviously they'd be making billions more if not for renewables. 

 

I don't believe that. There's no way we spent trillions of dollars to secure oil just so it could fade away. And really renewables aren't even close to being a viable reality any time soon. 

Talk about consumption, how much of the planet is going to get gobbled up to do that?

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Just now, Anler said:

I don't believe that. There's no way we spent trillions of dollars to secure oil just so it could fade away. And really renewables aren't even close to being a viable reality any time soon. 

Talk about consumption, how much of the planet is going to get gobbled up to do that?

You don't have to believe anything. Yet looking at the state of Texas, it shows that renewables are not only here to stay, but they're taking a big chunk out of big oil's bottom line. And no one with half a brain believes that renewables will completely replace oil anytime soon. 

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7 minutes ago, spin_dry said:

You don't have to believe anything. Yet looking at the state of Texas, it shows that renewables are not only here to stay, but they're taking a big chunk out of big oil's bottom line. And no one with half a brain believes that renewables will completely replace oil anytime soon. 

We have huge wind farms here, owned and built by BP. I understand there is a push for it. 

I am more referring to how much it's going to take to make all aspects of that available to everyone. Oil extraction is rather easy in comparison. Huge portions of the earth is going to have to be mined. 

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