3 On Your Side: Situation In Iraq Could Push Gas Prices Higher
By Jim Donovan
PHILADELPHIA (CBS) — Planning any road trips this summer? As most schools wrap up this week, the summer driving season will soon be in full swing. But the new conflict in Iraq may have prices at the pump climbing higher than expected. 3 On Your Side Consumer Reporter Jim Donovan explains.
Gas prices weren’t supposed to take too much of a ride this summer, pretty much on par with last summer’s range. But the increase in violence in Iraq by Islamic militants could push prices higher. President Obama says, “Obviously, if in fact, ISIL was able to obtain control over major output significant refineries, that could be a source of concern.”
Oil markets were counting on Iraq to increase stability over the next few years, and with that, increase its output. Iraq produces about 3.3 million barrels of oil a day, the second biggest producer in OPEC after Saudi Arabia.
Since oil prices are influenced by what might happen in the future, even fears of losing Iraq’s supply can force oil prices higher, a cost eventually passed on to consumers.
Oil Trader Daniel Dicker is the President of MercBloc. He says, “For people at the pumps, it’s a bad scene, because there are no real reasons for oil to drop here. The risks continue to remain on the upside. Iraq is only one of several geopolitical issues that are out there and in fact we’re going to see higher prices.”
Higher prices, but not the highest prices that Americans have seen at the pump in recent years. Many analysts don’t expect to see U.S. gas prices pass a nationwide average of four dollars per gallon.