Crude Prices Rise As Supplies Dwindle – March 2010

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Crude oil price is one of the most watched commodity prices on Earth, not just by investors but by regular people as well. As the price of oil goes up, so too does the price of gasoline and that can affect a lot of people. As a result, many people are paying attention to the rising price of crude oil to see what affect it is going to have on the economy, the stock market, and summer travel plans.

Crude Oil is at record high ahead of Summer Months

Crude oil prices continued their rise over the past week, coming in at $83 per barrel, which is about two dollars more than what the barrels were worth the previous week. The main reason for this is rise has been the lower than expected inventories of crude oil around the world, and the fact that the U.S Federal Reserve is keeping interest rates at their record low levels for the time being.

The Energy Information Administration announced that the inventories of crude grew by only one million barrels, which brings the reserves to 344 million barrels. The problem is that it was expected that there would be a growth in inventories by about two million barrels. Since the reality was half the expectation, crude oil prices rose.

Dow Jones Not Affected By Rising Oil Prices

That has not stopped the Dow Jones from growing and on Thursday it was up several points, but generally remained flat. As time goes on, it is expected that an increase in oil and gas demand will help the economy grow, which will get more businesses hiring workers, which will then help investors get more confident in the market and that will allow the Dow Jones to grow at a much faster rate than what is being seen now.

In further oil news, the Organization of Petroleum Exporting Countries has decided to stick with the levels of production that have been in place since December of 2008. OPEC has decided to do this because there is less demand for oil in the United States and other countries, which will affect the crude oil price even more.

All of this also pushed up gas prices, which came in at a nationwide average of two cents higher, with $2.789 per gallon being the average.

Crude prices are expected to continue rising as the weeks go on towards the summer season. Once summer hits, with demand being high and supplies being low, crude oil prices are going to increase greatly, putting strain on consumers but helping the stock market and the economy by building it up thanks to high cost barrels of oil.

Crude oil prices are going up, and it is because of the lower supplies than what experts were predicting. If this continues, prices will continue to go up and that can help investors gain confidence in the market. As time goes on, things like crude oil prices will help the economy gain new ground and get out of recession.

Further Reading:

Which Companies Will Come Out Strong After Recession

What is stagnant Economy