Crude oil prices have climbed 3 percent since Iraq said it would bar United Nations arms inspectors, raising concern that the United States might take military action against the oil-producing nation to force compliance with UN rules.
Iraq's refusal to allow inspectors access after a three-year absence coincides with Vice President Dick Cheney's trip to Europe and the Middle East to seek support for the war on terror. An attack would threaten Persian Gulf shipping and halt exports from Iraq, which pumps about 3 percent of world supplies.
Crude oil for April delivery has increased about 70 cents to $24.55 a barrel on the New York Mercantile Exchange. Prices still were down 12 percent from levels prior to September 11.
As several oil industry analysts say an attack on Iraq is looking more likely and believe a war premium is being built into crude costs, the weekly retail on-highway diesel prices released by the Energy Department Monday show the national average cost of diesel jumped more than 4 cents per gallon from last week to $1.22. The price per gallon is the most expensive it's been since November.
The highest prices nationally are once again found in California. Diesel there costs $1.39 per gallon on average, up more than 6 cents from a week ago. The lowest average prices are in the Gulf Coast region. Fuel there is $1.19 per gallon. The biggest leap in price from last week was seen on the West Coast. Diesel there rose 7 cents to $1.33 per gallon.
The remaining regions' price per gallon is as follows: East Coast, $1.23; New England, $1.30; Central Atlantic, $1.30; Lower Atlantic, $1.19; Midwest, $1.19; and Rocky Mountain, $1.20, respectively.