Local Analyst: Fall Of Baghdad Would Make Current Gas Prices ‘Look Like A Bargain’
June 13, 2014
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.”