If you haven't heard about it yet, you soon will: oil prices took a big jump yesterday in response to concerns about new violence in Iraq, and it will soon impact what you're paying at the pump.
Already today, gasoline prices in Michigan, Indiana, Ohio, are moving higher, as are localized prices in Kentucky, Illinois, and some other nearby cities, and its a harbinger of what's to come to the rest of the nation.
The major concern is Iraq's 3-plus million barrels of crude oil it pumps every day. Should insurgents take over or halt shipments of crude, suddenly Iraq's oil customers, including the U.S., will need to find other sources of crude. Less crude oil available means higher prices, it's the old fundamentals: supply and demand.
While this story is very fresh and we don't yet know for sure how long prices will rise or to what degree, there's no reason yet to believe that prices will spike significantly. Over the next week, most areas will see prices rising gently (excluding the Great Lakes areas mentioned above who are seeing spikes today), and by next week, the national average may be a few cents per gallon more than today's $3.64/gal.
Some communities will see prices rise faster than others, but rest assured, most areas will see similar increases. Markets seem to be taking a bit of a breather today- at this writing, WTI crude oil is little changed at $106.50/bbl while Brent crude is at $113.37/bbl. Gasoline futures and spot prices are little changed, so the markets appear to be sitting back watching what will happen next.
Just be prepared for slight increases, and we'll keep watching to see how the changing situation will affect what you pay at the pump.