The other shoe will drop in world oil markets this week after coalition forces headed by England, France, Canada and the U.S. attacked Libya over the weekend in an attempt to topple the Quaddafi regime.
Crude oil prices may increase $10 a barrel and fuel prices by 25 cents per gallon.
This is based on the possibilities Moammar Quaddafi vows ‘a long war’ and will avenge the bombings with retaliatory terrorist acts on other countries’ oil fields.
The price of gasoline and diesel per the AAA Daily Fuel Gauge Report is:
The average price of $4 per gallon gasoline mark will be surpassed and U.S pump prices will go to historical record highs. Crude oil prices last week show the wild gyrations with unsettling news from Japan at the beginning of the week keeping traders nervous:
The Central Intelligence Agency released a map in 2009 under the Freedom of Information Act showing the countries in the world with the most proven crude oil reserves. (see map below)
The majority of the countries shown in dark blue including Venezuela, Saudi Arabia, Libya, Nigeria, Iran, Iraq and Russia are not necessary friendly to us. Canada is the only country we can count on to continue friendly relationships with us but also has the capacity to deliver more crude oil to the U.S. within a short period of time without interruption caused by world events.
The U.S. first sent troops into Iraq in 1991, and some 20 years later, the U.S. is still there trying to install a democratic government. Gaddaffi is bound and determined to take a lot of innocent people with him on the way to the eventual demise of his regime. The longer the stalemate, the more likely crude oil…and gasoline prices…would spike.
About The Author – Bob van der Valk is a Petroleum Industry Analyst with over 50 years of experience in the oil industry.
The views and opinions expressed herein are the author’s own, and do not necessarily reflect those of EconMatters.