Violence in Middle East Spiking Gas Prices

9:52 PM, Mar 8, 2011   |    comments
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ATLANTA -- You've seen all the B-Roll; You've seen and heard from the talking heads. Another gas story in the news. But why is this all happening?

We wanted to find some clarity on what's causing all of this.

11Alive's Bill Liss went to an expert in international affairs and finance, Jeffrey Rosensweig, Professor of International Finance at Emory University's Goizueta School of Business, and a noted author, for some answers.

RELATED: Find low gas prices near you on 11Alive's Gas Map

"Why is this happening? Who is controlling the market and is it contrived?" Liss asked.

"Its speculators in the oil market keeping the oil price high. It's not contrived in terms of OPEC. They haven't tried to drive the price up over $100 by limiting the supply of oil. It's been driven up because of conflagration all across North Africa," Rosensweig said. "The fear that this conflagration could spread and close down ports -- it's not contrived that ports close. Its freedom fighters."

But as prices skyrocket so do consumer questions.

"What about the oil companies then -- How much control do they have and are they controlling what gets into the pumps that you and I see?" Liss asked.

"The oil companies really aren't controlling things. There is a world market and it really has to do with supply and demand," Rosensweig said.

He makes a comparison that shows how quickly prices can change.

"Things like gold and oil are a very global market and we are no longer the only game in town. China is a game in town. India is a game in town, Brazil even Canada," he said.

So what lies ahead for the American motorist?

"I don't think you have to sell your car. I don't think anything is contrived. I don't think the price of gas is going to go through the roof," Rosensweig said.

But for the immediate present, he clearly says the oil market is at the mercy of unfolding political events in the Middle East.

Could gas prices in the Metro reach the current California high of $4.89?

The only answer Rosensweig says, is in stability returning in the Middle East. Continued turbulence means continued uncertainty.

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