Gas Price Rise But American Oil Helps To Keep Rise Reasonable. Keystone Would Moderate It More.

Gas prices rising as militant attacks raise fears over OPEC oil production in Iraq

Crude oil prices have remained above $113 per barrel for five days in a row as the violence in Iraq continues. The fighting has raised fears that Sunni Muslim militants could take over OPEC's second-largest exporter, crippling the nation's oil production. As a result, U.S. drivers need to prepare to pay more at the pump.

BY ELIZABETH LAZAROWITZ  

 

NEW YORK DAILY NEWS

 

Published: Wednesday, June 18, 2014, 5:42 PM

Updated: Wednesday, June 18, 2014, 5:42 PM

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On Wednesday, global corporate energy heavyweights like ExxonMobil and BP continued to evacuate their staff from the country as the Iraqi government battled for control of the country's main oil refinery.

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STRINGER/IRAQ/REUTERS

U.S. drivers need to prepare to pay a little more to fill their tanks as the turmoil mounts in Iraq.

Worries that a push by Sunni Muslim militants to take over OPEC’s second-largest exporter could cripple the nation’s oil production have sent oil prices jumping in the past week.

“When you have oil prices hitting nine-month highs, that’s going to translate to higher prices at the pump,” Phil Flynn, a senior oil analyst at Price Futures Group told the Daily News.

Brent crude oil prices have clung above $113 per barrel for five days in a row as the fighting in Iraq intensifies.

That has helped push gas prices across the U.S. to around the highest levels for this time of year — when prices usually drop — since 2008, Flynn said.

LIU JIN/AFP/GETTY IMAGESDespite the violence in Iraq, the country’s main oil fields and facilities in the south have been spared. Those produce three-quarters of Iraq’s crude output.

As of Tuesday, the average retail price of gasoline across the U.S. hit $3.69 per gallon, six cents above where it was last year.

On Wednesday, Iraqi government forces battled for control of the country’s main oil refinery, and global corporate energy heavyweights like ExxonMobil and BP continued to evacuate their staff from the country.

So far, though, the country’s main oil fields and facilities in the south have been spared. Those produce three-quarters of Iraq’s crude output, according to the Energy Information Administration.

In addition, ample U.S. domestic crude production is helping cushion the blow of the oil price spike.

“The oil price changes so far do matter, but it’s not anything that could derail current global economic forecasts,” Morningstar energy equity analyst Stephen Simko told the News.

At this point, it will translate into dimes more at the pump, not dollars, Simko said.

But an escalation in the Iraq situation could mean “this modest (gas price) increase we’re happy for might be a distant memory,” Flynn said. “If the global economy starts losing 3.3 million barrels of Iraqi oil a day, it’s going to hurt.”