Posted on 06/13/2014 2:05:42 PM PDT by BenLurkin
LOS ANGELES (CBSLA.com) — Oil industry analysts are warning a brewing civil war between Islamic militants in Iraq could potentially send gas prices soaring here in the Southland.
KNX 1070′s Pete Demetriou reports the price of crude oil has shot up to $107 per barrel – the highest in 10 months – on reports that soldiers with the al-Qaeda-inspired Islamic State of Iraq and Syria captured two towns in an ethnically mixed province northeast of Baghdad. The average price of a gallon of self-serve regular gasoline in Los Angeles County dropped three-tenths of a cent Friday to $4.129, its lowest since April 7, according to figures from the AAA and Oil Price Information Service. While that price is nearly 13 cents more than one year ago, most experts are predicting a relatively tame 7 to 10 cents a gallon increase in the next two weeks as the summer season kicks off.
But any reduction in the flow of Iraqi crude due to the ongoing Islamic insurgency in the northern Iraq cities of Mosul and Tikrit could have worldwide economic consequences, according to oil industry analyst Phill Flynn, who said speculators are watching for the worst-case scenario.
“They think that Baghdad will not fall and that will be a more spirited defense of that city,” Flynn said. “But if it does fall and if the terrorists move further south, the price you’re paying at the pump today is gonna look like a bargain in a couple weeks.”
CBS News reports that a cellphone video from the Kurdish-controlled city of Irbil in northern Iraq showed the Islamic militants putting on a show of force in Mosul, parading vehicles captured from Iraq’s military through the country’s second biggest city.
A fighter using a loudspeaker urged the people to join the militant group “to liberate Baghdad and Jerusalem,” according to CBS News.
President Barack Obama said Friday he is weighing a range of options for countering the violent Islamic insurgency in Iraq, but he warned government leaders in Baghdad the U.S. will not take military action unless they move to address deep-seated political troubles.
“We’re not going to allow ourselves to be dragged back into a situation in which, while we’re there we’re keeping a lid on things, and after enormous sacrifices by us, after we’re not there, people start acting in ways that are not conducive to the long-term stability and prosperity of the country,” Obama said from the South Lawn of the White House.
The president did not specify what options he was considering, but he ruled out sending American troops back into combat in Iraq. The last U.S. troops withdrew in 2011 after more than eight years of war.
Flynn said crude analysts will closely watch the developments in the region over the next few days.
“We’re gonna see some type of uptick; how dramatic it will be will probably be dependent on the events over the next 24 to 48 hours,” Flynn said.
“I don’t understand why that would affect prices here. We have so much of our own drilling going on that surely we aren’t still importing tons of oil, are we? Maybe I’m just not up on this subject....”
Probably because of the mess world markets have made. In good stable times, it keeps prices low, but in times like these when a nation should be able to keep its resources local, the oil will just flow to the highest bidder, thus prices will jump. Obama is right about one thing, oil is a shackle but nobody has developed a good alternative, unless we want to walk and live in the dark.
They are not doing that that is for sure.
Oil is fungible. What is drilled here doesn’t necessarily stay here. If the world wide price of oil goes up then we can’t keep it lower here because it will be purchased by someone else and the price goes up to meet that export demand.
Here in California there is an 8% sales tax on gasoline on top of the other gasoline taxes. Jerry Brown and the Democrats get an extra bonus too, they get 8% of the gasoline price increase.
The folks Obama backed in Syria are winning, with the help of the puppet masters who control the Bush family. The response isn’t unexpected.
Doesn’t anyone see that this guy is a Muslim and he’s giving our country away? I am so frustrated, that Congress doesn’t even have the presence of mind to step in and defend our interests.
That would conflict with defending their interests.
Fattening their wallets and getting drunk.
Glad I bought a bike over the winter.
A real old-timer; built in the late 1920s in Austria. Got a good deal on it (equivalent of $20), though I had to fix it up a bit. Not bad for a museum piece. :D
What are you guys doing on capitol hill?
Fattening their wallets and getting drunk.
Biding their time so that they get their lifetime pensions. Bunch of freeloaders.
They're just trying to make Obama look bad with that inflammatory claim. (Getting in ahead of the WH press office)
Thanks for the information. It helped.
I thought only electricity rates would necessarily skyrocket.
Well... that's how the ruling elite make a killing in the stock market.
While the US imports of crude oil have been falling, we still import over 7 million barrel a day.
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_m.htm
While we only get 0.3 million a day from Iraq, all the other folks that normally get oil from Iraq will be buyiing on the same world market, trying to get more and the global price will rise.
Remember “No War for Oil”? Well, the lefties got their wish. Not only will we not have the oil, but the most vicious barbarians will have it instead with which to finance more terror against us.
Well, I was always in favor of taking the oil if we could get it. 1, to pay for the cost of liberating the country and 2, as an offset against OPEC monopoly practices. I didn’t advocate stealing the oil, just using it to pay us back and then paying a fair market price on our terms. Its win-win-win. The American taxpayer is reimbursed, the American economy is boosted by lower energy prices and we keep a lot of cash out of the hands of the bastards who are trying to kill us.
Thanks. The explanation helped.
Yes, people will tolerate the idiocy of the greenies until it begins to affect them financially. Personal economics trumps everything.
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