Oil and gasoline prices stablize amid Iraq concerns

Oil and gas prices took a breather Friday but were still higher for the week over concerns about Iraq and disruptions in oil supplies.

Crude oil prices were up slightly while wholesale gasoline prices were actually down 1 to 3 cents per gallon, depending on the region., after a runup Thursday that many expected to continue.

But it didn’t — at least not yet.

“It was kind of a tame day” compared with Thursday, said Jim Mosby, a partner for Admo Energy in Kansas City, which helps gas retailers in the region buy wholesale fuel.

After jumping over $2 on Thursday, the benchmark U.S. oil contract for July delivery rose 38 cents and closed at $106.91 in New York. For the week, the U.S. benchmark rose 4.1 percent.

Brent crude, a benchmark for international oils used by many U.S. refineries, gained 39 cents and closed at $113.41 a barrel in London. Brent rose 4.4 percent this week.

The quieter trading on Friday, however, isn’t any assurance that the pattern will continue next week. That will depend on Iraq.

Fears continue of a civil war in Iraq as Islamists fight government forces. But so far the fighting has been in the northern part of the country. The southern part is where 75 percent of the country’s oil is produced. If fighting reaches farther south, then higher oil prices are likely to follow.

James Williams, an analyst for WTRG Economics, said that in the most extreme case, if all Iraq’s oil production stopped, there would not be enough surplus oil production elsewhere to make up the difference.

That could mean $20-a-barrel higher oil prices, he said, and a 50-cent-a-gallon jump in gasoline prices.

Such an increase could be a political problem for President Barack Obama. Gas prices are now double what they were when he was inaugurated in 2009, when prices were greatly depressed by the recession.

U.S. net petroleum imports have dropped by half since 2009, according to the Energy Information Administration. That means a major supply interruption in another country would have less effect on the U.S. economy. But global oil prices would rise, and that is still largely what sets the price domestically.

Retail gas prices on the Missouri side of the Kansas City area averaged $3.48 per gallon on Friday. They were $3.27 a week ago and $3.50 a year ago. Prices were a few cents higher on the Kansas side, where state fuel taxes are higher.

This story was originally published June 13, 2014 at 5:30 PM with the headline "Oil and gasoline prices stablize amid Iraq concerns."