Crude oil is at a two-week high. This is being attributed to a few things by industry specialists, first and foremost being the growing oil spill in the Gulf of Mexico.
This current spill is releasing 1000 barrels of oil each day into the ocean thanks to a sunken oil rig. The total cost is expected to be around $1,500,000,000 USD and that money has to come from somewhere.
Also behind the list of reasons is the debt problems in Greece, Portugal and Spain, which caused a sell-off in future oil sales a few days ago.
Next on the list is a dip in U.S. weekly unemployment claims, closely followed by hopes that economic recovery will lift petroleum demand.
Even though it’s heavier than extra virgin olive oil and not suitable on toast, the curiously named “light, sweet” crude oil price for June delivery has been placed at $85.17 a barrel on the New York Mercantile Exchange, which is the highest delivery price since April 15. This means pump prices are expected to climb again (again) in coming weeks.
Stephen Schork of the Schork Group in Villanova, Pa., said he believes crude oil should be below $70 a barrel because of a supply overhang in the market, saying “There’s no question we’re on a better economic footing, but there’s no indication of demand outstripping supply.”
Mr Schork’s views make logical sense, but he’s missing one point: the human emotion known as greed, which would subsequently make the oil industry one of the most emotional to have ever existed.
Jim Ritterbusch at Ritterbusch & Associates, another company which chose it’s name from the 2010 edition of the “Predictable and Unadventurous Company Name Bumper Book”, said he expects “an unusually difficult trading environment going forward with prices gyrating within about the $80-$88 zone well into next month”.
Despite the doom and gloom outlook, this might actually be a good thing for the often-serious oil industry, because anything that gyrates is good – providing it has tassels.
To recap this over-padded and wacky article: as expected and as I predicted, oil prices have gone up, and gas prices will go up again soon. What gas prices will be in just 12 short months is sure to be interesting.
This means more expense if you use gasoline or diesel to get to work, but fantastic news if you drive an electric car. If you don’t have an electric car then I suggest you get one. This way, like watching the Iraq invasion on TV, you can curiously observe the chaos without actually being a part of it.
