When you pull into the gas station this week, don’t expect to find a bargain at the pump.
More Top Picks Best Snow Blowers
Even though Saudi Arabia is promising to ramp up production of petroleum, economists say there is no short-term fix for high gasoline prices. Oil may stabilize below $40 a barrel in the next few days, but prices aren’t apt to drop sharply.
“The principal reason oil is at these levels is because we have a global economic recovery taking place,” said Paul Kasriel, chief economist for Northern Trust.
Kasriel said Japan is shaking off a decade of stagnation, and growth in China shows no sign of abating while U.S. demand is picking up.
Terrorism is a wild card, of course. Economists say a severe attack that damages production in the Middle East would propel oil prices higher almost immediately. But, barring the unexpected, oil might even grow cheaper, as exporting countries increase output.
“We are probably going to slowly trend down,” said Marc Pado, chief U.S. strategist for Cantor Fitzgerald.