With political violence in oil-rich Iraq pushing up prices of global crude, U.S. consumers can expect gas prices — and the cost of their vehicle fill-ups — to follow suit, market analyst and investor Tobin Smith told Newsmax TV
But Smith, CEO of Nextbigthinginvestor.com
, warned "Midpoint" viewers and host Ed Berliner against projecting too much future price-hike fear on to Iraq's Sunni insurgency.
"Those are well-protected sites," Smith said of the wells, refineries and pipelines that allow Iraq to produce some 2 million barrels of oil a day.
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While that figure has fallen
of late, Smith said it's still well above the roughly 500,000 barrels daily that Iraq was producing only 18 months ago.
He also said Saudi Arabia remains a backstop for the global oil market, and can raise its own output substantially to counter supplies lost elsewhere and help keep oil prices stable.
Smith was joined by Jeff Yastine, editorial director of Newsmax finance newsletters, who said the "resiliency" of oil markets means they can handle a variety of global developments.
Yastine pointed to energy-hungry China's global oil buying spree — part of a national plan to create a large strategic reserve. Those purchases have not driven crude prices up, said Yastine.
Smith said there have been at least four oil-price scares since the start of the "Arab Spring" popular uprisings, and in every instance oil prices have fallen back after a run-up.
But he and Yastine agreed that some additional pain at the pump in the United States is likely in the near term, and could continue through 2014 if instability grows or fighting spreads in the Middle East.
Smith noted that in some U.S. markets, drivers are already paying $4.50 a gallon for premium fill-ups, and he said there are scenarios where that price could hit $5 by year's end.
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