Violence Abroad May Affect Oil Prices In The U
Crude oil prices hit a two year high this morning. The price canada goose black friday sale jumped comes as unrest grows in Libya, where a number of oil companies have pulled their staffs out of the country. Libya, an OPEC member, is the 12th largest oil exporter in the world and holds the largest oil reserves in Africa. Market analysts are worried that the violence in Libya and elsewhere in North Africa and the Middle East will threaten crude production across the region.
Canada Goose sale Amy Myers Jaffe is the director of energy research at Rice canada goose outlet University’s Baker Institute for Public Policy. The number is 800 989 8255. And you can join the conversation at our website. Canada Goose sale
canada goose And Amy Myers Jaffe joins us now from Rice University in canada goose coats Houston. Welcome to the program. canada goose
Ms. AMY MYERS JAFFE (Director Energy Research, Rice University’s Baker Institute): Thank you very much.
Canada Goose Online NEARY: Now, we haven’t seen a big effect on oil prices after the protests in Egypt and Bahrain. So why is it different with Libya? Canada Goose Online
canada goose clearance sale Ms. JAFFE: Well, I think that, first of all, Egypt was a very small oil producer and they used oil internally canada goose store in Egypt. And I think that now Canada Goose Parka the market is really starting to understand what I call the contagion effect. That the idea that somehow this was going to be contained in Tunisia and Egypt and it wasn’t going to spread to other countries or that somehow, magically, it wasn’t going to spread to countries that produce oil was probably a very naive image. canada goose clearance sale
And if you think about the history of the Middle East, you know, the Egyptian revolution of 1952 spread across the Middle East for over 10 years. I mean, Egypt had their revolution movement in the ’50s. And as late ’69, is when Colonel Gadhafi came to power on the heels of that same revolutionary movement. So what’s happening in the Middle East today could play out for a long time, and we could be in for high oil prices for a long time.
NEARY: Yeah. So what other countries if this if what’s going on now spreads to across that whole region, what would be the, really, key countries in terms of affecting the price canada goose clearance sale of oil and the price that Canada Goose Outlet we might have to pay eventually for gas?
buy canada goose jacket Ms. JAFFE: So starting out, there have already been disruptions of oil products exports from Libya to Europe. We’re seeing that today and. buy canada goose jacket
canada goose uk outlet NEARY: Right. And we just want to say we haven’t NPR News buy canada goose jacket has not yet confirmed that. But go ahead. canada goose uk outlet
Canada Goose online Ms. JAFFE: Okay. So as canada goose deals that spreads, there’s a possibility that you could have the same kind of unrest, say, in Algeria, which is also a big supplier of oil and canadian goose jacket natural gas to Europe. But I think the market’s bigger concerns would be if it spread around the Persian Gulf. So let’s say the Green Movement were to become more violent and active in Iran, you’re talking about 4 million barrels a day of exports. Canada Goose online
I might give people a little bit of a history lesson. In 1978, the shah starting firing on people in the streets in Iran and the oil industry went out on strike in sympathy with the people. And that is what caused the 1979 oil crisis. We kind of don’t remember. It started with oil workers going on strike. So, again, that could happen again in Iran.
The Iranian government is aware of that so they put a lot of canada goose clearance people from the Revolutionary Guard into key positions in the oil industry to try to avoid that. But my feeling is if they weren’t worried about it, they wouldn’t have to put the Revolutionary Guard in the oil industry. So that still remains a possible flashpoint.
canada goose coats on sale NEARY: You know, there was one headline this morning that said, if unrest spreads, gas may hit $5. Is that just speculation? Is there any indication that that’s reality or can you say that yet? canada goose coats on sale
Ms. JAFFE: Well, I think what I would say is, we’re basically about to beat a $3 gasoline. And we’re not to what we call the summer driving season. You know, there’s typically a psychological and physical push for the price of gasoline that comes around Memorial Day.
cheap canada goose uk So I think it’s just a question of how much oil really actually gets disrupted by May. And, you know, I think the jury’s still out on that. We don’t really know. Will Libya’s oil be disrupted in a small amount from some oil refineries? Or will all their oil fields go down, which would take us, you know, a little over a million barrels a day out of the market? cheap canada goose uk
canada goose uk shop Saudi Arabia might be willing to make some of that oil up. But what if Shia oil workers in Saudi Arabia, you know, made a protest or went on strike? Is that going to be disruptive? So I’m hoping that this last scenario of something spreading to Saudi Arabia is looking fairly unlikely. But if that happened, we would be in a major 1979 like crisis. canada goose uk shop
canada goose clearance NEARY: What effect are speculators having on prices right now? canada goose clearance
Ms. JAFFE: Well, I think that speculators were already in the market, and they were already betting on sort of a $95 to $100 oil price for this year, sort of based on, you know, supply, uncertainty, growth you know, compared to the economic rebound.
And so you have this very dynamic factor, which is that the higher the price of oil goes off of this turmoil in the Middle East, the quieter the rebound’s going to cheap Canada Goose be, because all of us are going to be spending a little bit more money on fuel. Businesses and industry are going to be spending more money on fuel. And so therefore, businesses‘ ability to hire new workers is going to be somewhat restrained by the fact that they have to pay higher fuel costs.
Canada Goose www.likecanadagoose.com Outlet And then there’s just the psychological effect. If we start to have a feeling in America that there’s a crisis looming, and gasoline prices could go to $5 a barrel, that just creates like a psychological break, like I’m afraid to plunk down money on my summer vacation because I’m afraid about the economy and whether I’d lose my job. And then it becomes sort of self fulfilling. Canada Goose Outlet
NEARY: We’re talking with Amy Myers Jaffe about the price of oil. If you’d like to join us, the number is 1 800 989 8255. We’re going to go to Andrew in Cleveland, Ohio.
Canada Goose Jackets ANDREW (Caller): buy canada goose jacket cheap Hi. Thanks for taking my call. I’m a courier in Cleveland. I work out of my own vehicle. I take you know, I transport various sundry things all over Cleveland and northeast Ohio. So I keep a close watch on the gas pumps every day. And, you know, the public perception is Canada Goose online that whenever there’s a rippling of crisis or even a rumor of some sort of crisis with the oil industry, the price goes up really quick, but then it’s slow to come down, if it ever does. Canada Goose Jackets
uk canada goose outlet You know, as soon as there’s any kind of news out of the Middle East that Canada Goose sale there’s some sort of problem, they run Canada Goose Jackets out there and jack up the price. Like today, it actually already shot up 20 cents, from about 3.09 yesterday. It’s 3.29 right now. And, you know, I’m just wondering, is that true? I mean, is that an accurate perception, that the oil companies are really quick to jack up the price, but then they make all kinds of excuses to bring it back down to what it might have been before? uk canada goose outlet
Canada Goose Parka Ms. JAFFE: I’m glad to say that you are totally correct. There are professors of energy economics who study that phenomenon. And it’s true. It’s very quick on the way up, and sticky on the way down. The interesting factoid is that a cargo of oil that would arrive at a refinery in the United States today, it would take it about six weeks to get to the gasoline station where you’re buying your gasoline. So theoretically, you know, whatever price is happening today, it’s based on whatever happened in oil prices six weeks ago Canada Goose Parka.