Gas Prices Fall, But Mideast Unrest Threatens to Push Them Upward
The price for a gallon of gasoline has continued its decline in the United States, but analysts fear that unrest in the Middle East could encourage it to reverse its downward trajectory before long.
The average price of a gallon of gas dropped 7 cents over the past two weeks across the country, bringing the cost to consumers to $3.47 per gallon for regular fuel, $3.65 for mid-grade fuel, and $3.78 for premium fuel, while diesel dropped 4 cents to an average of $4.04 per gallon.
The latest surveys show that Memphis, Tennessee is enjoying the lowest prices at only $3.04 per gallon, with Long Island, New York, a region still recovering from the devastating effects of Hurricane Sandy, suffering the highest prices at $4.18 per gallon. (Read More: President Obama Has Little Impact on Oil and Gas Companies)
While those prices are declining almost exactly in line with expectations from industry analysts, the hope that the drop will continue into 2013 is suddenly in jeopardy, thanks to the increase of military unrest in the Middle East, specifically as the conflict between Israel and Gaza escalates.
“Whenever violence escalates in the Middle East, as it has with Israel and its surrounding countries, oil prices are sure to increase,” said Jessica Brady, a spokesperson for AAA.
Given the oil-rich status of that region, the cost of a barrel of oil is destined to shoot upward if refining and shipping processes are negatively affected by military conflict, translating to higher costs for gasoline for drivers around the world, specifically in countries that rank as high-level importers, such as the United States. (Read More: Charting the Dramatic Gas Price Rise of the Last Decade)
A complicated affair that remains difficult to predict, the current situation that is seeing Israel hammer Gaza with artillery shows no signs of stopping, despite the best efforts by mediators from Egypt to negotiate a temporary truce; U.S. Secretary of State Hillary Clinton is currently en route to the region in order to try her hand at reducing tensions.