Oil nears $110 a barrel, gas prices jump 12 cents a gallon in a week. Eek!
Tensions with Iran have markets 'convinced there will be some type of confrontation,' says an energy analyst. Oil buyers are starting to 'horde,' and nervousness is affecting gas prices.
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A big jump in the California price, which rose 10 cents a gallon between Thursday and Friday, is mainly a market reaction to a fire at a refinery in Washington State. It could take several weeks to repair that refinery, according to industry sources.Skip to next paragraph
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The rising price of gasoline is also causing concern among some politicians in Washington. On Friday, House Speaker John Boehner called for President Obama to agree to build the Keystone XL pipeline, which would bring about 700,000 barrels of oil per day from Canada to the Gulf Coast.
“President Obama is out of excuses when it comes to blocking the Keystone pipeline and the thousands of jobs that come with it,” said Mr. Boehner in a statement.
Three Democratic lawmakers laid blame on speculators, who they said were using Iranian posturing to push gasoline prices higher than ever for this time of year. Reps. Edward Markey of Massachusetts, Rosa DeLauro of Connecticut, and Peter Welch of Vermont sent a letter to President Obama asking him to release oil from the Strategic Petroleum Reserve (SPR).
“It is essential that the United States have an aggressive strategy for releasing oil from the Strategic Petroleum Reserve to combat the speculators capitalizing on the fear in oil markets and send a message to Iran that we are ready, willing and able to deploy our oil reserves,” they wrote in the letter.
The SPR was last opened in the spring of 2011, after the uprising in Libya cut off some supplies to the world markets. That action reduced gasoline prices by 8 percent, the Democratic lawmakers said.
However, Mr. Flynn says SPR oil should be tapped only for national emergencies, not just because gasoline prices are high.
“What if there really is a war in the Middle East?" says Flynn. “We may really need that oil down the road, so to release it prematurely is dangerous policy.”
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