Pump Price Climbs as Oil Surges on Violence in IraqLynn Doan and Moming Zhou
Retail gasoline prices in the U.S. climbed for the third time in four weeks, boosted by the crisis in Iraq that sent oil futures surging.
The pump price averaged $3.686 a gallon today, up 1.2 cents from a week earlier, data posted on the Energy Information Administration’s website show. Oil, which accounts for two-thirds of the retail price of gasoline, gained $2.49 a barrel on the New York Mercantile Exchange in the same period and $4.88 in the past month.
The jump in crude, driven by concern that tension in Iraq will disrupt supplies, threatens to further raise gasoline prices at a time when they normally drop.
“We could see a spike somewhere close to 10 cents a gallon,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by telephone today. “If you look longer-term, this is very much a bullish story.”
Iraq’s sectarian violence showed no sign of abating, with Sunni Muslim militants and government forces battling to control Tal Afar. The country produced 3.3 million barrels a day of crude last month, trailing only Saudi Arabia among members of the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show.
Pump prices are 6 cents above year-earlier levels, EIA data show. Should gasoline remain above $3.652 a gallon next week, it’ll surpass 2011 levels and hit the highest seasonal price since 2008.