Strengthening on the jump in crude oil and volatility in the Middle East, the gasoline exchange traded fund climbed this week, with U.S. gas pump prices hovering around a six-year seasonal high.
The United States Gasoline Fund (NYSEArca: UGA), which tracks gasoline futures, was up 0.5% Tuesday. UGA increased 3.1% over the past week and is up 5.2% year-to-date.
According to the Energy Information Administration, the average pump price was $3.686 per gallon Monday, up 1.2 cents over the past week, as crude oil, which accounts for two-thirds of the retail price of gasoline, gained on concerns that the escalating violence in Iraq will disrupt pipelines, Bloomberg reports.
“If things deteriorate even more, the spike could be even bigger than that,” Phil Flynn, a senior market analyst at Price Futures Group, said in the article. “If it weren’t for the situation in Iraq, gasoline would be coming down by now. This will probably keep it elevated all summer. It’s really disappointing.”
Iraq extracted 3.3 million barrels per day of crude last month, second only to Saudi Arabia among the Organization of Petroleum Exporting Countries.
“We’d expect a slow rise in gas prices over the next few days, but we’re not expecting anything dramatic unless the situation further deteriorates in Iraq,” Michael Green, a spokesman for AAA, said in the article, pointing to an acceleration in gas prices during summer time driving.
RBOB gasoline futures were up 0.6% Tuesday, trading around $3.09 per gallon.