U.S. gasoline prices will increase roughly 20 cents per gallon because of the recent attacks in Saudi Arabia, oil analyst Andy Lipow predicted Monday, on CNBC.
That should lead the national price-per-gallon average to surpass $2.70 “over the next week to 10 days,” Lipow said on “Power Lunch,” monitored by Kallanish Energy. The average for a regular gallon has been roughly $2.56 for the last week, according to AAA.
“There is really going to be some sticker shock from the consumer, really starting tomorrow,” said Lipow, president of the Houston-based consulting firm Lipow Oil Associates.
Saudi oil facilities in Abqaiq and Khurais were struck last Saturday, with fire damage halting production of half the country’s global daily oil exports. Yemen’s Houthi rebels have claimed responsibility for the attack.
But Secretary of State Mike Pompeo said Saturday Iran is responsible and, on Monday, a Saudi-led military coalition said the attack was carried out by “Iranian weapons” and did not originate from Yemen.
Brent crude futures, the international benchmark, saw its biggest intraday jump at the open, soaring as much as 19.5%, to $71.95 per barrel. The contract settled at $69.06, up $8.84, or 14.71%, by early afternoon.
U.S. West Texas Intermediate futures finished the day at $62.90/Bbl, up $8.05, or 14.8%.
Lipow said his price prediction was based on roughly 5 million barrels of oil production per day being off the market for roughly three weeks.
While some parts of the production facility may be restarted sooner, Lipow said, damage to other parts of the Abqaiq production facility could “keep it offline for months.”
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