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$3 Gallon of Gas a Sure Thing This Summer, Trader Says

Tuesday, 10 Apr 2007 | 1:30 PM ET
Patrons line up for fuel, Tuesday, May 30, 2006, in Cincinnati. Oil prices rose above $72 a barrel Tuesday ahead of an OPEC meeting in Venezuela and the start of the Atlantic hurricane season later this week. The Memorial Day holiday marked the beginning of the peak driving season in the U.S., a period when energy traders are extra skittish about any loss of oil production or refining capacity. (AP Photo/Al Behrman)
Patrons line up for fuel, Tuesday, May 30, 2006, in Cincinnati. Oil prices rose above $72 a barrel Tuesday ahead of an OPEC meeting in Venezuela and the start of the Atlantic hurricane season later this week. The Memorial Day holiday marked the beginning of the peak driving season in the U.S., a period when energy traders are extra skittish about any loss of oil production or refining capacity. (AP Photo/Al Behrman)

Anthony Grisanti, an oil trader at GRZ Energy, told CNBC’s “Power Lunch” that $3-a-gallon gasoline this summer is a “foregone conclusion.”

“My personal opinion is you could see $3.50 (a gallon) very easily with a couple of refinery problems,” Grisanti said Tuesday. “Throw in a hurricane, and you could have $4 (a gallon) no problem at all.”

John Kilduff, senior vice president of energy risk management at Fimat USA, said production problems have kept supplies low.

What's Moving Oil?
Crude suffered its biggest drop since August 2005, and John Kilduff, Fimat USA energy risk mgmt. SVP; Anthony Grisanti, GRZ Energy oil trader; and CNBC's Sue Herera discusses what's moving the commodity.

“There’s just been a ‘refinery snag’ contagion over past two months,” Kilduff said. “It’s generated a tremendous premium for gasoline relative to crude oil. We’re certainly on our way to a $3 national average. Because it’s so profitable right now to make gasoline, the refineries have every incentive to get back on line. We’re seeing big imports of gasoline coming into the country and that may help. I’m not sure it will persist throughout the entire summer. I think we might see a bit of a price break through June and July before we head into the peak hurricane season, when these fears will be renewed.”

Oil recently fetched $62.15 a barrel on the New York Mercantile Exchange.

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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

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Kenny Polcari