Crude oil prices rose in response to escalating tensions between the United States and Iran after the assassination of Iranian Gen. Qassem Soleimani by U.S. forces in Iraq Jan. 3.By the next day, …
Crude oil prices rose in response to escalating tensions between the United States and Iran after the assassination of Iranian Gen. Qassem Soleimani by U.S. forces in Iraq Jan. 3.
By the next day, market jitters seemed to have calmed in the wake of the Iranian general's death. But the uneasiness returned when oil prices rose again after Iran launched missiles Wednesday at American bases in Iraq in retaliation for Soleimani's death, before stabilizing once again after President Donald Trump said Iran “appears to be standing down.”
No Americans were killed during the attacks, which helped alleviate anxieties that war between the U.S. and Iran would cause a jump in oil prices.
Oil prices rebounded Thursday after first surging on news of the Iranian attack and then falling once tensions appeared to be easing.
According to the Associated Press, Benchmark U.S. crude gained 43 cents to $60.04 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell $3.09 to settle at $59.61. It traded as high as $65.65 following the missile attack.
Brent crude, used to price international oils, advanced 24 cents to $65.68 per barrel. It fell $2.83 the previous session to $65.44, the AP reported.
So far, those tensions have resulted in higher prices at local gas pumps.
AAA Spokesperson Jeannette Casselano said it is “typical to see crude oil prices push more expensive amid current events.”
“What this increase means in terms of retail prices is yet to be seen. It depends on how expensive crude oil prices go and the duration at which it sells at a higher price point.”
According to AAA, the average gas price in Tennessee has been inching up for over a year.
Tennessee Gas Price average is $2.36, which is four cents more than one a week ago; six cents more than a month ago; and 38 cents more than a year ago.
On Friday, Speedway and Raceway on 25th Street were selling regular gasoline at $2.17, up from $2.10 earlier this week, according to GasBuddy.com. Across the street, Shell was selling its regular gasoline for $2.29, up 10 cents from just a few days ago; but still below the state average of $2.36 per gallon.
Some experts say the effect of a Middle Eastern geopolitical crisis on oil prices may not be as great as it once was, according to AAA. The U.S. energy industry, for instance, can ramp up shale oil production in places such as Texas.
However, increased domestic oil production may soften the blow, unlike in past years when the U.S. was more heavily dependent on foreign oil, according to Michael Webber, a mechanical engineering professor at the University of Texas, Austin.
“We’re in this new territory where the world oil markets are more dynamic and can tolerate this disruption more than they used to,” Webber told the AP.
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