HOUSTON — American drivers filling their tanks for the Thanksgiving weekend can forget the impact of the Middle East on oil prices for a day or two.
Global oil prices went up and down Wednesday as diplomatic efforts to end the turmoil in Israel and the Gaza Strip faltered and then appeared to succeed.
But after eight days of violence, most benchmark prices are little changed from where they began. A rise in oil and gasoline prices during a Middle East crisis would be no surprise, and there is no telling how long the cease-fire will last.
But oil experts say there is little chance of a big price spike since Israel and Gaza are not oil-producing areas and global supplies are currently plentiful.
In addition, while many oil-producing nations in the Middle East and elsewhere are pumping oil at unusually high rates, demand for petroleum products in much of the world has weakened because of the global economic slowdown.
“The global market is well supplied,” said Chakib Khelil, a former Algerian energy minister who was also president of OPEC.
“The stocks are pretty good, and the Gulf countries and Saudi Arabia are sustaining supplies while the weak economic situation in Europe is softening demand.”
Many analysts say the global Brent crude oil benchmark price, currently around $111 a barrel, would be $20 to $30 lower if it were not for the persistent instability in the Middle East and North Africa, particularly the tensions surrounding Iran’s nuclear energy policies.
Crude prices have fluctuated since tensions between Hamas and Israel spurred an exchange of rocket fire and bombs over the last week, as some traders feared that a full-fledged war might bring Iran and other regional powers into the conflict.
Prices eased on Tuesday by nearly 2 percent as negotiations for a cease-fire appeared to gain traction, but then rebounded about 1 percent after a bus bombing in Tel Aviv on Wednesday slowed progress. As reports surfaced that a cease-fire was again at hand, crude prices settled back down and then rose slightly.
But drivers in the United States have been minimally affected by the crisis, in part because a boom in oil drilling in North Dakota and Texas has decreased the country’s dependence on foreign oil.
The average price of a gallon of regular gasoline in the United States on Wednesday was $3.43, nearly 2 cents lower than a week ago and 24 cents lower than a month ago. Compared with a year ago, though, the price was up 8 cents, and the highest on record for Thanksgiving.
That is mostly because of the effects of Hurricane Sandy, which interrupted supplies in the New York metropolitan area and on much of the East Coast.
In many other states, drivers are paying less for gasoline than they were a year ago. According to the Oil Price Information Service and AAA, gasoline prices in New Jersey are roughly 30 cents above last year’s levels, while drivers in Massachusetts, New York, Pennsylvania and Rhode Island are paying over 20 cents more.
Oil analysts say those prices should begin to ease in the next two weeks as regional refineries and oil terminals that suffered flooding and power failures gradually return to normal operations.
With the exception of temporary, localized problems, oil experts say the country is well supplied with oil and gasoline, despite an Energy Department report on Wednesday showing that crude oil and motor gasoline inventories declined last week.
“Nationally, we have ample gasoline supplies, given where demand is,” said Anthony Rouse, chief economist at Phillips 66, the global refinery giant. Mr. Rouse said he did not think the Gaza crisis would affect domestic petroleum supplies or prices in any substantial way.
“Right now, this looks relatively self-contained in nations that are not really oil-producing areas,” he said, adding that even if Iran became more deeply involved, “the market is already factoring in lower Iranian production because of the sanctions.”
Iran is exporting just over a million barrels a day, down from three million in the summer of 2011 because of sanctions imposed by the United States and Europe.
Even so, production by members of the Organization of the Petroleum Exporting Countries has increased over the last year, with Iraq’s output up by 500,000 barrels a day and Libya recovering more than 1.5 million barrels a day lost during its civil war last year. Saudi Arabia and Kuwait are also producing more.
Countries outside of OPEC are also producing slightly more than a year ago, mainly because of increased output from the United States and Canada.
Demand for liquid fuels is down by 1.5 percent in the United States this year, according to the Energy Department, because of the slow economic recovery and a gradual improvement in the efficiency of cars.
Demand is falling even faster in Europe, and demand in the developing world is increasing more slowly.
Nevertheless, energy experts warn that a jump in oil prices is possible in the year ahead because so much of the world’s supplies come from politically unstable nations.
Pipeline sabotage has caused production delays in Nigeria in recent months. Libyan militias independent of government control can threaten oil production, though so far they have mostly left the country’s oil fields and refineries alone.
Sectarian violence is a threat to Iraq’s growing oil industry. Then there is the possibility that Israel or the United States might attack Iran to stop it from attaining nuclear weapons.
Iran has repeatedly threatened to block the Strait of Hormuz, the narrow waterway through which nearly one-fifth of the world’s oil is shipped.
“The Middle East will always be hanging over us,” said Lawrence J. Goldstein, a director of the Energy Policy Research Foundation, which is partly financed by the oil industry.
nytimes.com
Global oil prices went up and down Wednesday as diplomatic efforts to end the turmoil in Israel and the Gaza Strip faltered and then appeared to succeed.
But after eight days of violence, most benchmark prices are little changed from where they began. A rise in oil and gasoline prices during a Middle East crisis would be no surprise, and there is no telling how long the cease-fire will last.
But oil experts say there is little chance of a big price spike since Israel and Gaza are not oil-producing areas and global supplies are currently plentiful.
In addition, while many oil-producing nations in the Middle East and elsewhere are pumping oil at unusually high rates, demand for petroleum products in much of the world has weakened because of the global economic slowdown.
“The global market is well supplied,” said Chakib Khelil, a former Algerian energy minister who was also president of OPEC.
“The stocks are pretty good, and the Gulf countries and Saudi Arabia are sustaining supplies while the weak economic situation in Europe is softening demand.”
Many analysts say the global Brent crude oil benchmark price, currently around $111 a barrel, would be $20 to $30 lower if it were not for the persistent instability in the Middle East and North Africa, particularly the tensions surrounding Iran’s nuclear energy policies.
Crude prices have fluctuated since tensions between Hamas and Israel spurred an exchange of rocket fire and bombs over the last week, as some traders feared that a full-fledged war might bring Iran and other regional powers into the conflict.
Prices eased on Tuesday by nearly 2 percent as negotiations for a cease-fire appeared to gain traction, but then rebounded about 1 percent after a bus bombing in Tel Aviv on Wednesday slowed progress. As reports surfaced that a cease-fire was again at hand, crude prices settled back down and then rose slightly.
But drivers in the United States have been minimally affected by the crisis, in part because a boom in oil drilling in North Dakota and Texas has decreased the country’s dependence on foreign oil.
The average price of a gallon of regular gasoline in the United States on Wednesday was $3.43, nearly 2 cents lower than a week ago and 24 cents lower than a month ago. Compared with a year ago, though, the price was up 8 cents, and the highest on record for Thanksgiving.
That is mostly because of the effects of Hurricane Sandy, which interrupted supplies in the New York metropolitan area and on much of the East Coast.
In many other states, drivers are paying less for gasoline than they were a year ago. According to the Oil Price Information Service and AAA, gasoline prices in New Jersey are roughly 30 cents above last year’s levels, while drivers in Massachusetts, New York, Pennsylvania and Rhode Island are paying over 20 cents more.
Oil analysts say those prices should begin to ease in the next two weeks as regional refineries and oil terminals that suffered flooding and power failures gradually return to normal operations.
With the exception of temporary, localized problems, oil experts say the country is well supplied with oil and gasoline, despite an Energy Department report on Wednesday showing that crude oil and motor gasoline inventories declined last week.
“Nationally, we have ample gasoline supplies, given where demand is,” said Anthony Rouse, chief economist at Phillips 66, the global refinery giant. Mr. Rouse said he did not think the Gaza crisis would affect domestic petroleum supplies or prices in any substantial way.
“Right now, this looks relatively self-contained in nations that are not really oil-producing areas,” he said, adding that even if Iran became more deeply involved, “the market is already factoring in lower Iranian production because of the sanctions.”
Iran is exporting just over a million barrels a day, down from three million in the summer of 2011 because of sanctions imposed by the United States and Europe.
Even so, production by members of the Organization of the Petroleum Exporting Countries has increased over the last year, with Iraq’s output up by 500,000 barrels a day and Libya recovering more than 1.5 million barrels a day lost during its civil war last year. Saudi Arabia and Kuwait are also producing more.
Countries outside of OPEC are also producing slightly more than a year ago, mainly because of increased output from the United States and Canada.
Demand for liquid fuels is down by 1.5 percent in the United States this year, according to the Energy Department, because of the slow economic recovery and a gradual improvement in the efficiency of cars.
Demand is falling even faster in Europe, and demand in the developing world is increasing more slowly.
Nevertheless, energy experts warn that a jump in oil prices is possible in the year ahead because so much of the world’s supplies come from politically unstable nations.
Pipeline sabotage has caused production delays in Nigeria in recent months. Libyan militias independent of government control can threaten oil production, though so far they have mostly left the country’s oil fields and refineries alone.
Sectarian violence is a threat to Iraq’s growing oil industry. Then there is the possibility that Israel or the United States might attack Iran to stop it from attaining nuclear weapons.
Iran has repeatedly threatened to block the Strait of Hormuz, the narrow waterway through which nearly one-fifth of the world’s oil is shipped.
“The Middle East will always be hanging over us,” said Lawrence J. Goldstein, a director of the Energy Policy Research Foundation, which is partly financed by the oil industry.
nytimes.com
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