Iraqi production reached a high of 3.6 million barrels a day earlier this year, and the Iraqis said as recently as Tuesday that the country would reach its goal of 4 million barrels a day by the end of this year. Unless the political situation magically stabilizes quickly, that will not happen.
The threat to Iraq’s oil production has boosted prices for both Brent and West Texas Intermediate (WTI). On the ICE Thursday morning, Brent for July delivery traded at $111.13, and WTI traded at $105.37 on the NYMEX, up 1.1% and 0.9%, respectively.
Adding to the uncertainty about Iraqi production were Wednesday’s report on U.S. inventories and the decision by OPEC to maintain its target ceiling of 30 million barrels a day. The U.S. Energy Information Administration reported that U.S. crude inventories were down 2.6 million barrels in the week ended June 6. And if a significant portion of Iraqi production is halted, only Saudi Arabia has the spare capacity to replace a portion of it.
Why, if the United States is producing so much oil right now, will gasoline prices rise in response to the events in Iraq? Especially because U.S. crude cannot be exported. The United States still imports around 7 million barrels of oil a day and that oil is priced on the Brent benchmark. As long as some U.S. refiners are paying the Brent price and selling their refined products at a higher price, all U.S. refiners will sell at the higher price regardless of how much the refiner pays for crude. Refiners in the United States that have access to cheaper U.S. crude will raise fuel prices and pocket the higher profits.
The price increases will start fairly quickly too. The longer the situation in Iraq continues, the more U.S. drivers can expect to pay at the pump.
ALSO READ: EIA Predicts Higher Gas and Crude Oil Prices
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
