A market surplus of oil has forced prices down since last summer, leading to relief at the gasoline pumps for consumers, but those oil prices could be on the way back up, the Wall Street Journal reports today. Oil futures are rising today, after falling 9 percent yesterday. Crude oil supplies are at their highest levels in the United States in 80 years.
“U.S. oil for March delivery recently traded up $3.45, or 7.1%, to $51.90 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $3.52, or 6.5%, to $57.68 a barrel on ICE Futures Europe,” the Wall Street Journal reported.
Expectations of lower production would lead to higher crude oil prices later this year, which would in turn raise prices at the pump for consumers. The smaller number of active oil rigs in the United States is another factor cited in expectations of falling oil production.
“Oil was up about 6 percent on Thursday as rising violence in producing country Libya and an expected boost in oil demand from a central bank easing in China helped crude rebound from one of its sharpest daily routs ever in the previous session,” Fox Business reported on the prediction of rising oil prices.
Expectations of high oil prices are based in part on the prediction of higher demand, MarketWatch is reporting today. The increase in U.S. crude oil supplies caused oil prices to fall yesterday. If the oil glut continues, oil prices may not rise much higher soon.
“Crude-oil futures settled with a more than 4% gain to reclaim the $50-a-barrel level on Thursday, as better-than-expected jobless claims data in the U.S. and a higher economic growth forecast for the European Union helped improve the outlook for energy demand, MarketWatch reported.
“After falling for several months, gas prices might be on their way back up again. Gas prices in Texas are going back up again, the Killeen Daily Herald reported today. The Herald quoted GasBuddy on the average gas prices in Texas increasing by 1.6 cents per gallon,” theInquisitr reported.
With increased demand in the coming spring and summer months, and reported slowdowns in production, it seems likely rising oil prices will lead to consumers paying more for gasoline at the pump.
[Imagine from www.acs.org]