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Political turmoil in Egypt increases price of oil

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Barrels of oil
Barrels of oil. Photo Credit: Lars Christopher Nottaassen

Barrels of oil

The political turmoil in Egypt created chaos in their country, and now it starting to affect the United States.

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According to USA Today, the price of oil rose above $102 for the first time since last September on Wednesday. The Wall Street Journal’s Market Watch reported that the price of oil increased by 6.9% during the week, which was the highest weekly jump since February 2011. Reuters reported the price jumped another $2 on Friday. US Crude oil closed at $103.22.

Some people speculate that the instability in Egypt is behind this price increase for oil. Don Rissmiler, an economist at Strategas Research Partners, told USA Today that the situation in Egypt is creating “heightened uncertainty” in markets.

According to the Washington Post, the concern does not lie with Egypt’s oil corruption, but with the Suez Canal. USA Today, said the canal sees around 2.5 million barrels pass a day. People are also worried that something may happen to the Suez Canal.

However, Tom Kloza, the chief analyst for Gasbuddy.com, disagrees. He told CNN Money‘s Aaron Smith that most people do not believe the Suez Canal will be shut down. Kloza said it was the military coups who are responsible for the uncertainty, as they made the traders nervous about the energy supply.

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Economic growth is also to blame. CNN Money said oil prices were already rising before the military coup, and grew 8% in the last month due to economic growth in Egypt. CTV News believes the United States also has themselves to blame for price increase.   US employers added 195,000 jobs in June, as the nation’s economy appears to be slowly getting back on track.

In other positive news, the price of gas has been decreasing. According to Politico, the average price of gas went down five cents, and dropped by 14 cents in the past month.

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John Bean
John Bean just completed his junior at the University of Missouri, and expects to graduate in May 2014. John is a journalism major, and is also working on a business minor. He grew up near Chicago, and hopes to become a sportswriter someday. To answer everyone’s question, he prefers the White Sox over the Cubs. John is currently an intern for TheUrbanTwist.com.

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