Oil Prices Today Briefly Reached $90 per Barrel

For the first time since the month of May, oil prices today briefly reached $90 a barrel following a statement from the government that U.S. demand for oil is increasing. According to the report from the Energy Information Administration, the average demand for oil rose in the United States during the past week for the third consecutive week. The demand for oil had been low for the most parts of this year compared to last year as production declined and driving was reduced.

Price Futures Group’s analyst Mr. Phil Flynn says the economic slowdown has been “the talk of the town,” yet the market is currently seeing a slight improvement in oil demand.

In the NYMEX, benchmark U.S. crude gained 65 cents to finish the trading day at a per barrel oil price at $89.87. During the early parts of the day, it reached its highest rate since the 30th of May at $90.04 a barrel.

In London, Brent also moved higher by $1.16 cents to end at a per barrel oil price of $105.16.

The weekly petroleum report of the EIA also noted a sudden fall in gasoline stocks in the past week with a production cut in refineries. Supplies of oil also dropped, but it was lower that what was expected by analysts.

In the meantime, the biggest companies of China cautioned of sharp profit drops this year. China’s economy is still growing at a much quicker rate than Western countries, including the United States. However, Premier Wen Jiabao gave a warning that the growth rate will not be stable. China is the second biggest consumer of oil worldwide behind the United States and an economic slowdown will reduce the oil demand globally.

Home builders in the United States in the past month broke ground on the largest number of new apartments and homes in almost four years, said the Commerce Department. The report gave more proof that the housing industry is starting to recover.

The current gasoline price of $3.426 a gallon is an increase of 2 cents per gallon said the AAA, OPIS and Wright Express. The current gasoline price of regular gas is higher by 10 cents per gallon since July started, but it is still lower by 51 cents per gallon since April’s first week.

In other energy news, the price of heating oil gained 3.54 cents at a per gallon price of $2.8776. Meanwhile wholesale gasoline gained 3.84 cents to finish at a per gallon price of $2.8834. Natural gas gained 17.7 cents to close at $2.9730 for every 1,000 cubic feet.

By: Chris Termeer