Analyst: Libya’s Unrest Won’t Have Big Impact On Gas Prices

AAA Mid-Atlantic, However, Says Average Price Still On The Rise

NEW YORK (CBSNewYork/AP) – Amid the chaos and turmoil in Libya, some analysts believe that oil prices will soon skyrocket.

But according to Oil Price Information Service analyst Tom Closaw, that’s not the case. The sky is not falling in the world of oil, he said.

“The world has sort of lost its head a little bit,” said Closaw, who does not foresee $4 or $5 gasoline.

LISTEN: WCBS 880’s Sean Adams reports on one expert’s perspective on Libya’s effect on oil prices

The unrest in Libya has created a fear premium and the market can absorb any loss of Libyan production, he said. Plus, the pressure to sustain the economic recovery will keep prices in check.

“High prices—$100 a barrel for crude oil, $3.75 gasoline—have consequences on demand in the United States and elsewhere that might temper the runaway nature of the market,” he said.

Meanwhile, AAA Mid-Atlantic said the average price of regular gasoline on Friday was $3.14, up 10 cents from last week.
That’s also much higher than a year ago, when New Jersey motorists were paying $2.55.

The national average price also rose to $3.29, up 13 cents from last week. That’s also much higher than the national average from a year ago, which was $2.69, according to AAA Mid-Atlantic.

The sharp boosts are due to surging crude oil prices, which are being driven by the tumultuous situation in Libya and fears that the unrest may spread to other oil producing areas in the Middle East.

Saudi Arabia, another oil-rich country, would have a different impact on price, Closaw said.

“If we wake up one morning and we hear about violence on the streets of Riad or Jetta or Saudi cities, all bets are off as far as where prices go,” he said.

For consumers to save money on gasoline, CBS 2’s Cindy Hsu spoke with AAA-New York’s Robert Sinclair about ways to save at the pump.

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

  • charles

    Seems that the previous major gasoline price hikes of $4.00 a gallon were not related to the price of oil.

    The oil companies at the time stated the huge increase in gasoline prices were not related to the price of crude oil but that many of the refineries in the southern states were shut down for maintenance and the demand exceeded the supply. What gives?

    During the Vancouver Olympics, newscaster Brian Williams did a wonderful story on Canada and stated that 80% of the oil the U.S. imports is canadian oil.
    This was a shocker to me because i was led to believe by accounts in the media that most of our imported oil came from overseas. What gives?

  • Truth

    It’s the oil commodities trader that forces the price to go up. It’s an opportunity to make money while the rest of the world suffers. Yes Saudi can cover the losses of Libya but you don’t hear hear anything from them because they are making more money if it’s 100 a barrel instead of 85. Need to get it off the market and sell it for true value. All these countries with oil sell it for less than a dollar a gallon.

  • Richard v

    Gee did I just not read gas is $4+ a gallon?
    Well we built the wells so whats your next idea?
    Don’t bark at me. It is your call, not mine.

  • Paul

    Trump 2012

  • Blah

    Libya provides 2% of the world’s oil. If it’s gone it shouldn’t be more than a hiccup. Lucky for us though we have the fear factory going strong to keep the gas prices high. You’d sooner rail at the ‘government controlled media’ than recognize that the only reason there’s only one guy saying this is because it doesn’t make millions of dollars for rich, old, white men.

  • Doris

    Incredible how he’s the only one claiming this… never trust government controlled media my friends… CBS, NBC, ABC, CNN, and MSNBC all lie to make the administration look good!!!

    • jamesng

      first world country doesnot depend on libya oil so no impact

      • Dolphin

        “robberies made easier during a riot” – That’s exactly what going to happen to oil prices.

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