Bumpy Ride Ahead: Gas Prices May Soon Hit $4 a Gallon

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Refineries Key to Rising Gas Prices

Iraq announced on Sunday the opening of a new oil export terminal in the Persian Gulf, able to increase by some 200,000 to 300,000 barrels per day the amount of crude it pumps into holds of the world's tankers. The country's total oil exports currently stand at around 1.7 million barrels a day.

Does this increase mean good news at the pump for U.S. drivers?

No, says Lipow. World demand for oil is rising. So, Iraq's increase in exports means good news for oil-thirsty nations in Asia, Africa and South America. But in the U.S., where demand is falling, it will have no affect the retail gas prices.

What would lower U.S. gas prices, he says, is the ability to pipe crude from newly discovered fields in North Dakota to refineries on the Gulf of Mexico, home to 40 percent of U.S. refining capacity. That increase in domestic gasoline production would lessen U.S. dependency on more expensive imported fuel. By the end of this year, North Dakota will be producing more oil than Alaska. But the pipeline, for now, remains, he says, "a political football."

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