While many cities across the country are seeing lower gas prices at the pump, the continuing violence in Egypt is causing oil prices to increase. As the oil prices continue to climb, there is the possibility that there could be more pressure put on fuel prices, according to experts, and then consumers would end up feeling the pain at the pump.
The violence in Egypt rises concerns that there will be difficulty in having supplies properly transported or having the routes blocked and it becoming more difficult to get the oil transported out of the area. The main focus of concern has been the Suez Canal. At the present time, about 2.5 million barrels of oil each day pass through the canal. As long as the canal remains open and the oil continues to pass through it, most experts believe there will be no significant changes in gas prices, however, if the canal should close, there will be significant price fluctuations.
On Friday, the cost of a barrel of oil closed at $107.46 on the NYMEX, which was $1.49 more than the price for a barrel of oil a week earlier. The Middle East supplied 35 percent of the world’s oil output during the first quarter of the year, according to the International Energy Agency. Thirty-five percent is a significant amount and that is why so many eyes are focused on the Suez Canal and Egypt during the time of violence and unrest. Because such a significant amount of the world’s oil supply comes from the Middle East, Egypt’s unrest and the fear of the closure or blockage of the Suez Canal could significantly impact the availability of oil globally.
According to reports, the national average for a gallon of regular unleaded gasoline is $3.54, which is 2 cents lower than last week. The current average prices are 15 to 20 cents less per gallon than they were during the same time period last year. Experts believe the oil prices will continue to spike upward until the violence ends. Gas prices won’t be safe from spikes until things have settled in Egypt as well.
Jessica Brady, a spokesperson with AAA Auto Club, “As long as the Suez Canal remains open and oil is transported daily, motorists should not see a huge spike in gas prices as a direct result of violence in Egypt. That also means not to expect large drops in gas prices, either.”
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