Middle East Violence Pumps Up Oil Futures
According to the Los Angeles Times, the violence in the Middle East has helped push the price of oil futures up 8 percent in the past week. The May contract for West Texas intermediate, used as a price benchmark in the U.S., rose briefly above $27 per barrel, before closing at $26.88 on the New York Mercantile Exchange. According to George Clemen, an analyst at Oil-gasoline.com, “Crude oil supplies are not directly at risk due to the Israel-Palestinian conflict; however, there could be a spillover effect if more countries become involved.” On Monday, Iraq called on the Arab states to use oil as a weapon against those supporting Israel and to stop the current Israeli actions against the Palestinians. On Monday, April 1, the average U.S. price per gallon for self-serve regular was $1.371, up 2.9 cents from the week before, but still down 7.1 cents from the same period last year, according to the Energy Information Administration’s weekly survey of 800 service stations.In California, the average price was $1.592 per gallon, up 3.1 cents from last week. Last year, the California average was 12.4 cents higher. Although California refineries do not use much oil from the Middle East, pump prices in California are generally higher than in other states because of reduced competition in refining and marketing gasoline and because the cleaner-burning gasoline mandated by air quality regulations is produced by few refineries outside of the state.