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Oil price flirts with US$100 per barrel
Source: Agencies |
November 12, 2011, Saturday
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THE price of oil is flirting with US$100 per barrel for the first time since the summer, as fears fade that Europe's debt crisis will spread and trigger another recession.
Yesterday's benchmark crude rose US$1.21 to end the day at US$98.99 per barrel in New York. Prices climbed as high as US$99.20 earlier in the day. Brent crude, which is used to price many foreign oil varieties, increased 45 US cents to finish at US$114.16 in London.
Higher oil prices will lead to more expensive gasoline, since gas is refined from crude. The national average of US$3.44 per gallon is already the highest ever for this time of year, and analysts say pump prices are likely to hit US$4 a gallon (US$1.05 a liter) by spring.
Oil prices have climbed from about US$77 a barrel at the beginning of October as two of the market's biggest fears - an unraveling of the 17-nation eurozone and another recession in the US - gradually eased. That has reassured investors that demand for oil will likely stay strong.
Greece and Italy now have new political leadership to help them deal with their massive debts. Greece appointed former European Central Bank Vice President Lucas Papademos as its new prime minister, and an interim cabinet was sworn in yesterday. And Italy approved crucial economic reforms that were demanded by the European Union. Italy will also get a new prime minister.
Stock markets rose yesterday as well, with the major indexes up about 2 percent.
A rise in oil prices to US$100 per barrel is a key milestone, indicating that the economy can afford to pay those prices.
"It's a sign of confidence that we're not going to flip back into recession," PFGBest analyst Phil Flynn said. "It's also sending a message that we better conserve supplies or find new sources of oil."
Oil, gasoline and diesel supplies have been falling this year, and continued declines could push oil prices higher. The government said this week that crude supplies are 7.3 percent below their five-year average, while gasoline supplies are 2.9 percent lower and diesel supplies are down 7.5 percent.
Supplies have dropped as diesel consumption rises in the US Refineries also have been exporting more gasoline and diesel this year.
In other energy trading yesterday, heating oil rose 2 US cents to end at US$3.1716 per gallon, and gasoline futures fell 3 US cents to finish at US$2.6038 per gallon. Natural gas fell 6 US cents to end the day at US$3.5840 per 1,000 cubic feet.
Yesterday's benchmark crude rose US$1.21 to end the day at US$98.99 per barrel in New York. Prices climbed as high as US$99.20 earlier in the day. Brent crude, which is used to price many foreign oil varieties, increased 45 US cents to finish at US$114.16 in London.
Higher oil prices will lead to more expensive gasoline, since gas is refined from crude. The national average of US$3.44 per gallon is already the highest ever for this time of year, and analysts say pump prices are likely to hit US$4 a gallon (US$1.05 a liter) by spring.
Oil prices have climbed from about US$77 a barrel at the beginning of October as two of the market's biggest fears - an unraveling of the 17-nation eurozone and another recession in the US - gradually eased. That has reassured investors that demand for oil will likely stay strong.
Greece and Italy now have new political leadership to help them deal with their massive debts. Greece appointed former European Central Bank Vice President Lucas Papademos as its new prime minister, and an interim cabinet was sworn in yesterday. And Italy approved crucial economic reforms that were demanded by the European Union. Italy will also get a new prime minister.
Stock markets rose yesterday as well, with the major indexes up about 2 percent.
A rise in oil prices to US$100 per barrel is a key milestone, indicating that the economy can afford to pay those prices.
"It's a sign of confidence that we're not going to flip back into recession," PFGBest analyst Phil Flynn said. "It's also sending a message that we better conserve supplies or find new sources of oil."
Oil, gasoline and diesel supplies have been falling this year, and continued declines could push oil prices higher. The government said this week that crude supplies are 7.3 percent below their five-year average, while gasoline supplies are 2.9 percent lower and diesel supplies are down 7.5 percent.
Supplies have dropped as diesel consumption rises in the US Refineries also have been exporting more gasoline and diesel this year.
In other energy trading yesterday, heating oil rose 2 US cents to end at US$3.1716 per gallon, and gasoline futures fell 3 US cents to finish at US$2.6038 per gallon. Natural gas fell 6 US cents to end the day at US$3.5840 per 1,000 cubic feet.
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