War jitters are adding an average $4 premium on the price of a barrel of oil, says Bruce Cavella, oil analyst for the forecasting firm DRI-WEFA, Lexington, Mass. Since the beginning of the year, the price of the benchmark West Texas Intermediate crude oil has steadily increased, and by August, it was 47% above last December's level, says Cavella. "As long as the possibility of war with Iraq exists, prices will remain around $30 per barrel," he says.
The impact of higher oil prices has yet to fully impact the price of bituminous concrete, according to the Bureau of Labor Statistics. In July, the BLS producer price for bituminous concrete was up only 2.2% for the year. However, DRI-WEFA predicts that it will increase 1.2% during the third quarter and another 0.8% increase in the fourth quarter.