Oil analyst warns gas prices will continue to rise amid 'very ugly' inflation, fuel shortage looming
Stephen Schork explains why a recession is 'unavoidable at this point'
Oil analyst warns recession currently 'unavoidable'
The Schork Group principal Stephen Schork warns that the average price for gas 'is going to remain high' and notes that 'as offshoot, food prices have to remain high.'
The Schork Group principal Stephen Schork warned on Thursday that gas prices will continue to rise amid "very ugly" inflation and that a recession is "unavoidable at this point."
"Every single recession in the United States, beginning with the Arab oil embargo in 1974, was preceded by a massive rise in energy costs," Schork "Mornings with Maria" on Thursday. "We have never seen a massive rise like we’re seeing today, so be prepared for it."
Schork provided the insight shortly after it was revealed that inflation hit a fresh 40-year high in February, largely driven by higher gas prices.
The consumer price index climbed 7.9% on an annual basis, according to data released on Thursday by the Bureau of Labor Statistics. Month-over-month, inflation rose 0.8%.
The year-over-year reading is in-line with estimates and compares with an annual 7.5% jump in January, marking the fastest increase since February 1982, when inflation hit 7.6%.
Gas jumped 6.6% in February and accounted for almost a third of price hikes. Food rose by 1%.
Inflation 'out of control' at a time when the economy 'is headed towards a recession': Kevin Hassett
Former Chairman of the Council of Economic Advisers Kevin Hassett weighs in on the Labor Department's inflation report for February, noting that 'wages aren't keeping up with prices,' which means 'real incomes are going down.'
The February data does not include the Russia, Ukraine conflict which have pushed prices at the pump to $4.32 per AAA as of today, a record high.
Schork warned that the average price for gas "is going to remain high" and noted that "as [an] offshoot, food prices have to remain high."
He pointed to the current "war in this country on natural gas."
"People don’t realize, natural gas is the biggest component in ammonium nitrate, that’s fertilizer, that increases crop yields," Schork explained.
"The crop yields are already down and lower come next fall, come this planting season, so we are going to be looking at not only shortages in fuel, but shortages to create food and shortages to transport that fuel."
On Thursday morning, the price of oil resumed its move higher on Thursday morning after a sharp drop the day before.
The market is examining whether major producers will raise supply in an attempt to help plug the output lost from Russia due to sanctions for its invasion of Ukraine.
As of late Thursday morning, benchmark U.S. crude rose to $111.11 per barrel in electronic trading on the New York Mercantile Exchange.
Brent advanced $3.33 to $114 per barrel in London.
OIL PRICES RISE AFTER US BANS IMPORTS OF RUSSIAN CRUDE
The price of U.S. crude fell 12% Wednesday, easing a run-up caused by fears that the war might disrupt Russian supplies.
The price peaked at $127.98 on Mar. 8 and is still up around 10% month-to-date and over 40% year-to-date.
Inflation 'very ugly situation right now': Stephen Schork
The Schork Group principal Stephen Schork says oil and gasoline are already 'at crazy levels' and warns that prices will only continue to rise as travel demand increases over the summer.
Schork told host Maria Bartiromo on Thursday that based on his studies of volatility, the Schork Group is "assigning a 23% probability that oil will be at $150 a barrel as we go into the peak summer month of July."
He went on to explain what that would mean for drivers.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"That translates into $5.05, $5.20 [for a gallon of gas], which will be or certainly will challenge the all-time record high real cost, i.e. adjusted for inflation, gasoline price from 2008," Schork said.
CLICK HERE TO READ MORE ON FOX BUSINESS
FOX Business’ Ken Martin contributed to this report.