Iraq Violence Boosting Fuel Prices

WASHINGTON, D.C. -- As violence in Iraq has intensified, so have fuel prices. According to AAA, the national average per regular gallon was $3.66 on Monday, 5 cents more than it was on the same day in 2013.

In the past five days, the price of a regular gallon, on average, increased by a total of 2 cents per gallon as violence in Iraq has increased. The $3.66 average is a penny more than a week ago and a little more than 1 cent more than one month ago.

Recent gas price increases buck a trend of fuel prices decreasing in June as the Memorial Day holiday has already passed and July 4 is still in the future. The national average price per gallon has fallen in each of the last three months of June by an average of 20 cents per gallon.

However, turmoil in Iraq is likely to prevent gas prices from decreasing this June, AAA predicts. The current highest average price per gallon can be found in Hawaii at $4.35. California drivers and Alaska drivers also are paying above $4 per gallon -- at $4.09 and $4.06 respectively -- a trend that has lasted for the past 23 days.

Despite the unrest, AAA reports that prices have remained relatively stable in 34 states and the District of Columbia in the past week, only changing by plus or minus 2 cents. But if Iraq uncertainty escalates to a civil war, this can certainly change. In addition, AAA noted that if violence overflows to bordering countries, U.S. fuel prices could rise even higher.

According to the Energy Information Administration, Iraq has the fifth-largest proven oil reserve in the world and is the second-largest producer of crude oil in the Organization of the Petroleum Exporting Countries. 

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