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Terror unease inflames gas prices
Drivers paying 'fear premium' of up to 36¢
H. Josef Hebert
Associated Press
Jun. 2, 2004 12:00 AM
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WASHINGTON - A "fear premium" is driving up gasoline prices well past $2 a gallon.
Motorists may be paying as much as 36 cents a gallon more at the pump because of the petroleum industry's anxiety that terrorists might disrupt oil supplies, a fear that increased with two murderous rampages by al-Qaida-linked gunmen at oil compounds in Saudi Arabia.
Estimates vary, but some energy economists said as much as $10 to $15 is being added to the cost of every barrel of crude oil.
The fear factor went up a notch over the long holiday weekend with the attack in Khobar, Saudi Arabia, that killed 22 people. It was the second attack in a month against oil workers in the Islamic kingdom.
Oil prices surged more than $2 a barrel on futures markets Tuesday, the first trading day since the Khobar attack.
"There obviously is a fear premium," said Seth Kleinman, an oil market analyst at PFC Energy.
Dennis
