Middle East tensions add uncertainty as gas prices rise

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A year-end spike in road trip travel due to the holidays helped to push both the national average and averages across the Delaware Valley higher on the week, Wilmington-based AAA MId-Atlantic.

Crude oil prices moved above the $60 mark again this week as drops in crude oil inventory and turmoil in the Middle East play into the price increase.

While AAA expects gas prices to dip in the coming weeks as a decrease in demand for gasoline typically follows the holiday season, higher oil crude prices may reduce declines.

  • Pennsylvania gas average at $2.82 today, unchanged overnight and up 3 cents in the last week.  
  • New Jersey gas average at $2.63 today, unchanged overnight and up 3 cents in the last week.
  • Delaware gas average at $2.43 today, up a penny overnight and up 3 cents in the last week.  
  • Maryland gas average at $2.54 today, unchanged overnight and up 3 cents in the last week.
  • Philadelphia (5-county) area gas average at $2.75 today, unchanged overnight and up 4 cents in the last week.  
  • S. Jersey gas average at $2.57 today, up a penny overnight and up 5 cents in the last week.  
  • National gas average at $2.58 today, unchanged overnight and unchanged in the last week.  

At the close of NYMEX trading Friday, West Texas Intermediate (WTI) crude oil settled at $63.05 per barrel, nearly 2.16 percent higher than last Friday’s close.

Crude prices hit an eight-month high Friday, following the death of Maj. Gen. Qasem Soleimani, Iran’s intelligence chief, as a result of a U.S. airstrike Thursday.

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About a fifth of the world’s oil supply passes through the narrow Strait of Hormuz, off the southern coast of Iran.

If the route were closed due to threats of attacks, it could be a setback to the global economy. The impact on consumers will depend on the size of the price increase and how long the price increase lasts.

“Local motorists welcomed 2020 with slightly higher prices at the pump, following a record number of drivers hitting the road for the holidays,” said Jana L. Tidwell, manager of Public and Government Affairs for AAA Mid-Atlantic. “Like motorists, AAA is watching the current situation in the Middle East in terms of potential short- and long-term impacts to crude oil and gasoline prices.  At this point is too soon to speculate.”

Following the U.S. airstrike on Iran, oil markets will have to deal with a lot of “what-if” situations ranging from possible diplomatic disagreements to full-on attacks on the Middle Eastern oil infrastructure. Some analysts see Friday’s market reaction to the event as temperate, citing the reaction to last year’s attacks on the Saudi oil installation at Abqaiq in mid-September.  Following those attacks, oil prices jumped $8 to $9 per barrel but dipped less than three weeks later.

To check on prices in your neighborhood, log on to AAA’s Fuel Price Finder (http://www.AAA.com/fuelfinder).

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