Metro-East News

June 20, 2014

Iraq unrest is driving up gas prices in the Belleville area

Metro-east motorists are paying the price for restlessness in Iraq every time they fill up.

Gas prices have increased about 14 cents per gallon over the past two weeks, from $3.71 to $3.85, at most filling stations in the Belleville area.

"Even though we have a lot of it -- there is no fuel shortage -- we have lots of fear," St. Louis financial expert Juli Niemann said. "So, only in anticipation of supply problems, it's going up."

Crude oil was trading at $107 a barrel at midday on Friday. But Niemann predicted that if Iraq plunges into a full-fledged civil war, a barrel of oil could go up to $150, especially if insurgents take control of Iraq's oil production facilities.

"With the normal, seasonal increase in consumption at this time of year combined with this situation in Iraq, things could go up quickly," Niemann said. "But the good news is that it should only be a temporary situation."

Mike Right, vice president at the American Automobile Association of Missouri, said the trend in gas prices isn't following recent history. He said that leads him to believe it's all about political events. And if the situation in Iraq simmers down, prices could fall quickly.

"I think what's going on right now is mostly the Iraq thing," Right said. "We usually see prices peak around Memorial Day and then everything starts to moderate for the rest of the summer. So this is contrary to the norm over the past few years."

While gas prices have been moving up, Right said they're actually lower than they were a year ago.

Across the state of Illinois, the average price of a gallon of regular unleaded is $3.94. Right said at this point in 2013 it was $4.02.

Right said he, too, is hopeful that the price spike is only temporary.

"But every day it seems like there is more bad news from an area that is very sensitive when it comes to oil prices," Right said. "I think we could probably get to $4."

Right said he thinks prices will fall short of the record highs at the pump for the area, $4.20 cents in 2008.

Contact reporter Scott Wuerz at swuerz@bnd.com or call 239-2626.

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