In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
The likelihood of U.S. military strikes on Syria has helped boost crude oil prices over the past two months. West Texas Intermediate (WTI) oil futures, which averaged $94.29 per barrel for the first half of 2013, hit highs of $110.00 last week before settling back to $107.65 on Friday.
While Syria is not a major oil producer, its proximity to critical shipping lanes, pipelines and the Suez Canal would disrupt oil logistics, even in the event of limited hostilities. Iran’s potential response to U.S. action against its close ally further amplifies the potential for oil supply problems. A temporary price spike in WTI to $120 and Brent (world) oil to $140 per barrel would be likely if hostilities extended beyond a single U.S. military strike.
U.S. gasoline prices, coming off of summer driving season, were seasonally lower in late August, but higher oil prices mean higher gas prices in September.
Contact John T. Barone at [email protected].