Consumer Watch: Iraq's impact on gas prices

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by Andy Treinen

WHAS11.com

Posted on June 17, 2014 at 4:41 PM

LOUISVILLE, Ky. (WHAS11) -- Still far from ideal for drivers' wallets, gas prices weren't supposed to take too much of a ride this summer, staying pretty much on par with last summer's range. With renewed unrest in Iraq that could be changing.

The violence in Iraq is on the rise and the march on major cities by Islamic militants could push prices higher.

Obviously, if in fact, ISIS is able to be taken control over major output significant refineries, that could be a source of concern.

Oil markets were counting on Iraq to increase stability over the next few years, and with that, increase its output.

Iraq produces about 3.3 million barrels of oil a day, making it the second-largest producer after Saudi Arabia.

Since oil prices are influenced by what might happen in the future, even fears of losing Iraq's supply can force oil prices higher. It's a cost that is eventually passed on to consumers.

For people at the pumps, it's a bad scene because there are no real reasons for oil to drop here. The risks continue to remain on the upside. Iraq is only one of several geopolitical issues that are out there and, in fact, we're going to see higher prices at the pumps.

These are higher prices, but not the highest prices that Americans have seen at the pump in recent years. Many analysts don't expect to see US gas prices pass $4 a gallon as a nationwide average.

If you have a consumer issue you’d like us to look into send an e-mail to consumerwatch@whas11.com.

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