Iraq Turmoil Drives Gas Prices To Their Highest Since 2008

Summer Gasoline Forecast
Rich Pedroncelli/AP
By JONATHAN FAHEY

Violence in Iraq is pushing U.S. gasoline prices higher, depriving drivers of the usual price break between Memorial Day and July Fourth.

The national average price of $3.67 a gallon is the highest price for this time of year since 2008, the year gasoline hit its all-time high.

The good news is that gasoline is not likely to spike above $4 as it did 6 years ago. Or even cross $3.90, as in 2011 and 2012.

"You are going to pay a little more than we thought you were going to pay," says Tom Kloza, chief oil analyst at the Oil Price Information Service and GasBuddy.com. "But you are not going to see any apocalyptic numbers."

Gasoline prices typically fall in the weeks following Memorial Day, after supplies increase enough to fill up the cars of the nation's vacationers as summer approaches.

This year, drivers are paying more. The average has risen every day for a week, and is now higher than it was on Memorial Day -- with more increases sure to come.

Even before violence in Iraq broke out, this year's predicted decline was slower than expected because of rising U.S. fuel demand and extensive maintenance at some Gulf Coast refineries that reduced gasoline output.

Then, last week, Iraqi insurgents seized a pair of cities and pledged to attack Baghdad. None of Iraq's oil fields were targeted, most are far away from the fighting, and oil exports have continued to flow. But Iraq is OPEC's second-largest exporter, so worries that oil production might be impacted was enough to send global oil prices higher by 5 percent over the last week.

The average price of gas rose 3 cents a gallon during the past week, and analysts expect more increases over the next couple of weeks.

How the situation in Iraq plays out is impossible to predict, but analysts note that the global market is well-supplied with oil and fuels. Morgan Stanley wrote in a recent report that the potential for a significantly higher sustained oil price was "limited without a major disruption," and that "the conflict will likely be contained primarily North of Baghdad, limiting the impact on oil exports."

But drivers in 15 states are already paying more for gas than they have since March of 2013, according to Kloza. The national average will likely soon surpass this year's high of $3.70 a gallon, set on April 28.

Kloza thinks the national average may get close to last year's high of $3.79 a gallon, but he does not expect to see it reach the highs of 2011 and 2012, when it rose above $3.90 a gallon.

And the chances of the average crossing the $4 mark?

"The [last place] Mets have a better chance of winning the World Series," he said.


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321 Comments

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d.barack

Go rate your posts dunce, I'm going out to shoot some pool. Adios Darren the dunce.

June 20 2014 at 9:25 PM Report abuse -4 rate up rate down Reply
d.barack

Hey Darren, do you walk to your Mosque, or take your lunch ?

June 20 2014 at 9:17 PM Report abuse -5 rate up rate down Reply
d.barack

Hey Darren, how was your nap, in your section 8 house ?

June 20 2014 at 9:14 PM Report abuse -4 rate up rate down Reply
d.barack

The Golden Parachute Club has theirs, and they don't give a sh1t which side you vote for.,
But the new Com / Lib party wants Sharia Law like their Messiah Obama .

June 20 2014 at 9:04 PM Report abuse -4 rate up rate down Reply
1 reply to d.barack's comment
teapartyisdying.uall

More factless right wing paranoia. Did you take your meds today ?

June 20 2014 at 9:11 PM Report abuse +2 rate up rate down Reply
6 replies to teapartyisdying.uall's comment
d.barack

Here again all you Jihadists for Obama, I will be one of the infidels stopping your plight. This isn't the USSA yet. Your Messiah Obama released 5 of his muslim brotherhood pals loose from Gitmo, to help the demise on America, and barry Soetoro is still marching to comply with George Soros. Barry's bottom line is to kill the American Economy, like his brotherhood pal Bin Laden tried to do.
Keep chanting yes we can, all you Obama Zombies !!!

June 20 2014 at 8:39 PM Report abuse -3 rate up rate down Reply
1 reply to d.barack's comment
teapartyisdying.uall

The only people that are going to believe you are Rush Limppig's low information voters. Bush and the Republicans already killed the economy.

June 20 2014 at 9:07 PM Report abuse +2 rate up rate down Reply
1 reply to teapartyisdying.uall's comment
d.barack

Nancy Pelosi is a LimpPig follower ? hmmmmmmm

June 20 2014 at 9:11 PM Report abuse -1 rate up rate down
d.barack

Hey Chrissy, why don't you take Drippy for a ride in your Volt ? Drippy' Chrissy Volt ride, and you can lick your Obama plate together. ROTFFLMMFAO

June 20 2014 at 7:22 PM Report abuse -3 rate up rate down Reply
1 reply to d.barack's comment
chris1011

The Chevrolet Volt has won car of the year honors in the U.S. and Europe, has sold more units so far this year than it did in all of 2011 and represents what Motor Trend magazine calls “a game changer” that boasts “some of the most advanced engineering ever seen in a mainstream American automobile.”

So why are a few vocal talking heads trying to poison the well on innovative American technology by attacking the Volt?

As Bob Lutz, the former GM executive and outspoken climate change denier who championed the idea for the Volt often says, the Volt project started in 2006, long before Obama became president. And it was former President George W. Bush, not Obama, who pushed for the federal tax credit for purchasing the Volt.

President George W. Bush pointed out our addiction to oil. The more people drive electric cars, the less we have to rely on other countries — including some troubling ones — for oil.

Why should Americans care about electric cars? Aside from the environmental and national security benefits inherent in using less oil, there is the economic argument. The U.S. auto industry cannot cede this valuable market to foreign automakers. American automakers need to stay in the ballgame if they want to remain competitive in the world market and create new jobs.

Let’s recognize the Volt for what it is: an innovative cutting-edge technology that is helping to re-establish the U.S. as a worldwide leader in the automotive industry. As Motor Trend said, it’s a game-changer. And it is, quite simply, one terrific car.

June 21 2014 at 12:10 AM Report abuse -1 rate up rate down Reply
2 replies to chris1011's comment
d.barack

Overpriced generator and conversation piece, as only 53,393 have been sold.

June 21 2014 at 7:59 AM Report abuse +1 rate up rate down
comment814

POINTLESS rant, now get over yourself!

June 23 2014 at 11:14 AM Report abuse +1 rate up rate down
chris1011

I don't care anymore what the price of gas is. I drive an electric, which costs me $0.25 to drive 20 miles on my daily commute (a comparable gas car would cost $4.00 per day in gas at the present rates). I plug the electric car in at night and I have a full charge every morning. The car has an on-board charger with a 350 mile total range. Had the car 2 1/2 years now and never ran out of charge yet. Cost new - $28k fully loaded, leather interior, etc.

June 20 2014 at 4:55 PM Report abuse +4 rate up rate down Reply
3 replies to chris1011's comment
alfrankenfool

Reduce the demand for Gasoline and Diesel, require all Democrats to use their party mascot for all transportation needs.

June 20 2014 at 1:08 PM Report abuse -3 rate up rate down Reply
1 reply to alfrankenfool's comment
drpmindmender

Demand for gasoline and diesel fuel is down 6% since 2006

June 20 2014 at 3:29 PM Report abuse +4 rate up rate down Reply
1 reply to drpmindmender's comment
dopey.obamite

Perhaps in the US with the increases in MPG standards and ethanol additives in our gas, along with the lowest workforce participation since carter. But if you look at central/south America and China, demand is up. Diesel use on the rise in Europe as well.

June 20 2014 at 4:30 PM Report abuse -5 rate up rate down
d.barack

The Iraq turmoil re-kindled because Barry Soetoro, AKA Barack Hussein Obama let his 5 Muslim Brotherhood pals loose from Gitmo, to continue the Jihad on the infidels.

June 20 2014 at 1:05 PM Report abuse -3 rate up rate down Reply
1 reply to d.barack's comment
teapartyisdying.uall

What a nice fox news spin, you're worse than Cheney. LOL !.....keep brain washing Rush Limppig's low information voters.

June 20 2014 at 9:03 PM Report abuse +2 rate up rate down Reply
2 replies to teapartyisdying.uall's comment
d.barack

So, You vote for a living? How's life in Underwood, Indiana ?

June 20 2014 at 9:07 PM Report abuse -2 rate up rate down
d.barack

So Barack didn't let them Go ?

June 20 2014 at 9:30 PM Report abuse -1 rate up rate down
d.barack

Hey Barry Soetoro, I know you don't have anything to do with the gas prices, but you SUCK anyway.

June 20 2014 at 3:12 AM Report abuse -4 rate up rate down Reply