As Egyptian Turmoil Intensifies, Oil Prices Hover Above $102

July 3, 2013 — -- As oil supplies fell in the last week by about 10 million barrels and unrest in Egypt roils oil and financial markets, drivers can expect a bump in gas prices this Independence Day weekend, say petroleum watchers.

The political turmoil in Egypt intensified as the Egyptian President Mohammed Morsi said on Wednesday that he will stay in office despite an ultimatum that he meet the demands of protesters or else the military will suspend the constitution and disband parliament.

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Hundreds of thousands of protesters have gathered in Cairo against President Morsi, who was sworn in June 2012. Former President Hosni Mubarak was ousted in 2011.

While Egypt is not an oil producer, its control of the Suez Canal makes it a major player in the business of the world's fuel supply. On Tuesday, the price of oil passed $100 a barrel for the first time since September. On Wednesday morning, the price remained above $102 a barrel.

"Refineries are humming along which is good, but unrest in Egypt is having an impact," said Patrick DeHaan, GasBuddy's senior petroleum analyst. "I would expect the national average to begin moving higher in the days ahead, but in a much more gentle manner."

The Middle East supplies about a quarter of the world's crude oil output and over 2 million barrels of oil are transported through the Suez Canal every day, according to the Associated Press.

On Monday, the Energy Department's U.S. Energy Information Administration said the country's average price of regular gas fell by 8 cents to $3.496 for the week that ended July 1, though the average is 14 cents higher than they were a year ago.

"Gasoline prices may begin edging upward, but this likely won't be a spike, more a gentle increase than what we've seen in some areas so far this year," DeHaan said.

Tom Kloza of the Oil Price Information Service has a similar outlook for oil. He told ABC News' Richard Davies, "I don't think we're looking at any sort of explosive move in oil prices. The US is going to be producing more crude oil than we're importing probably within the next six weeks or so."