A shutoff of Iraq oil will have major effects. Producing more than 3 million barrels a day, it’s the second biggest OPEC producer after Saudi Arabia. From what has just happened, Thursday, Brent crude futures LCOc1 rose 3 percent to $113.27 a barrel (up from $110 a barrel) while U.S. crude CLc1 added 2.2 percent to $106.71, the highest reading for both since September. The great concern that this civil war will shut off Iraq oil is having its effects on stock markets around the world. With American stocks falling, it will hit the middle class the hardest with jobs and inflation.
Predictions I have read say that oil could go to more than $116 a barrel. With the summer driving season ahead, gas prices are expected to go up another 5 to 10 cents per gallon. The price of gas typically rises about 2 to 2.5 cents per gallon for every dollar that crude oil rises. Add another 10 to 25 cents to the expected summer driving season increase.
If you pay the current national average gas price of $3.64/gallon, you may be paying up to $3.90 to $4/gallon at the summer peak driving season.
If your state is a high gasoline tax state like mine (37.5 cents/gallon) you may be paying even more. Right now because of our high gas taxes we are paying an average of $3.90/gallon. I expect to be paying $4.16/gallon.
Cavuto expects over $6 a gallon in a couple of weeks if this Iraq crisis isn’t over, but he thinks Saudis will help out to bring down price later...??
WTI oil has risen to $107.33 at the moment.