Libya Concerns Spell Borderland Gas Prices Spike
Tensions in the middle east are starting to cost borderland drivers…at the pump.
With Libya still in chaos and little information available about the status of its oil fields and ports, oil prices rose on Friday and finished about 13 percent higher for the past week.
The surge in oil, which peaked at $103.41 per barrel for benchmark crude on Thursday, hit drivers across the U.S., where gas pump prices are already the highest ever for this time of year.
A gallon of regular shot up 11.6 cents in the past three days.
The average price in El Paso hit $3.26 per gallon Friday. That number was $2.67 just one year ago.
Nationally, the average price was $3.32 headed into the weekend.
The Libyan rebellion has all but shut down exports from there, and traders say it’s hard to gauge how much world supplies – and prices – will be affected as similar uprisings unfold in North Africa and the Middle East.
Analyst Stephen Schork said that traders have already priced in a “fear premium” of about $15 to $20 per barrel, but that premium could grow as long as fighting continues.
“We just have a whole bunch of unknowns” when it comes to the region, Schork said. “Every time you turn on the television, all you see are riots. It’s a very difficult market to predict.”
The International Energy Agency and Saudi Arabia have both tried to soothe energy markets in recent days, promising to tap into spare supplies and make up for any sustained production losses out of Libya.
Libya produces about 1.6 million barrels per day, less than 2 percent of world consumption. It exports much of that oil to Europe.
The IEA member nations have about 1.6 billion barrels in reserves. The Saudis produce about 8.5 million barrels per day and could ramp that up to 12 million or more.
Meanwhile, back in El Paso, driver Ruben Guerra said the surge in gas prices could soon mean a cut to his weekend travels.
“I’m headed out to Ruidoso,” Guerra told ABC-7. “If they keep going up I won’t be able to keep making trips.”
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