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Could New Pipeline Drive Gas Prices Higher?

Later this week, President Obama is expected to announce that he'll fast track construction of the southern half of the Keystone XL pipeline.

Many expect the oil project to create jobs and combat high gas prices, but Philip Verleger of PKVerleger says it could actually push gas and diesel prices higher in some parts of the country.

According to Verleger, although the new pipeline would relieve a glut of crude oil that’s currently in Cushing, Oklahoma, that’s actually bad news for drivers in parts of the Midwest.

It’s a simple case of supply and demand.

Verleger says some people in the Midwest are currently benefiting from a discount due to that very glut and if the supply decreases then price will increase.

Get all the details. Watch the video now!

This is a phenomenon that John Schoen wrote about at length at our sister network, MSNBC. Click here to go to Why the Keystone pipeline would boost pump prices






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Trader disclosure: On Mar 21, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long CSCO; Tim Seymour is long PEP; Tim Seymour is long DELL; Tim Seymour is long IBM; Tim Seymour is long HPQ; Tim Seymour is long AAPL; Brian Kelly is long SMH; Brian Kelly is long QQQ ; Brian Kelly is long SPY CALLS; Brian Kelly is long IWM CALLS; Brian Kelly is long MEXICAN PESO; Brian Kelly is long US DOLLAR; Brian Kelly is short EWA; Brian Kelly is short EWY; Brian Kelly is short EWH; Brian Kelly is short EWY AUSSIE $; Brian Kelly is short NEW ZEALAND $; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long C; Pete Najarian is long C CALLS; Pete Najarian is long JPM CALLS; Pete Najarian is long BAC CALLS; Pete Najarian is long INTC; Pete Najarian is long YHOO; Pete Najarian is long COP; Pete Najarian is long PEP; Pete Najarian is long HPQ; Pete Najarian is long SCCO; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long INTC; Josh Brown is long MRO; Josh Brown is long SBUX; Josh Brown is long COP; Josh Brown is long DELL

For Sara Senatore
Bernstein currently makes a market in SBUX

For John Kronthal
Nothing to disclose

For Paul Hickey
Nothing to disclose

For Philip Verleger
Nothing to disclose

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