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SMALL BUSINESS
Cold Weather Causes Oil, Fuel Price Jump
By DIRK LAMMERS
, AP
-Energy prices rose Monday as an October chill across much of the U.S. sent thermometers plummeting along with the weakening U.S. currency.
"The early blast of winter is giving oil a bit of a boost," said PFGBest analyst Phil Flynn.
Benchmark crude for November delivery gained $1.58 to $73.35 on the New York Mercantile Exchange. Heating oil rose 4.8 cents to $1.90 a gallon and natural gas jumped 13.5 cents to $4.91 per 1,000 cubic feet.
Even though there are enormous supplies of all three due to the recession and there is little chance of a shortage in the near term, crude prices have risen 5 percent in three trading days.
It is the weakened U.S. currency that continues to lure global investors, who can buy oil for a bargain because it is priced in the dollar. There are billions going into the energy markets despite huge surpluses, especially in natural gas.
The U.S. dollar index, which tracks the dollar against other major currencies, is down 14 percent since early March, and crude has jumped by about $20 per barrel.
There are also hopes that energy demand will rise as the economy recovers and early indications from major corporations supported that optimism.
Aluminum maker Alcoa Inc. last week opened the earnings season with a surprisingly strong profit report. Top banks JPMorgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. report this week along with Google Inc., Southwest Airlines Co., Intel Corp., IBM Corp., General Electric Co., and Johnson & Johnson.
Retail gasoline prices edged up overnight, but are still below $2.50 per gallon. Last year, a gallon of gas cost about $3.25 at this time, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are 10.2 cents below levels of a month ago and 93.2 cents down from a year ago.
In other Nymex trading, gasoline for November delivery gained 3.3 cents to fetch $1.80 a gallon. In London, Brent crude rose $1.50 to $71.50. on the ICE Futures exchange.
—
Associated Press Writers George Jahn in Vienna and Alex Kennedy in Singapore contributed to this report.
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-10-12 13:04:18
COMMENTS ( 12 )
popecash
This comment has been deleted.
CDSJ
4:14PM Oct 12 2009
Better buy it or hedge it now. The supply-demand is not the issue. It's the fact the American dollar is getting weaker daily. That weakness will compound with the deficit spending that our government (democrats) are doing. Obama has borrowed and spent more money than every president from Washington thru Bush II COMBINED. China has bought the bulk of our treasury notes that finance Obama's reckless spending spree. If health care and cap and trade both pass, the deficit spending will continue, the dollar will weaken, and the result is commodities such as oil, nat gas, food will increase in price. Simply put, the rest of the world is becoming more scared of the US dollar. As these spendthrift socialist and fascists of the democratic party take us furthur in debt, no one will take on our dept without a higher yield to match its risk. Thats how you get inflation and higher prices on everything.
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Mklhorvath
3:00PM Oct 12 2009
I think the reality of the market is speculators causing the gyrations in oil prices and China has passed us a the leading importer of oil. If our trade deficit fell last month because of a decline in oil imports, what other answer could there be?
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MooreSwamp
1:41PM Oct 12 2009
Bend over Bruce, and take it like a man! Assuming you are a working-class slob like the majority of us who monitor this sham daily, economic "momentum" as you call it, is not a consumer-friendly term. And if you're looking for "caring," dude, you can hang that sh#t up! It's every man for himself. The fallout from the recent collapse has created a run on any and all profits, before the citizens of this country grab their pitch-forks and force regulation upon thes fu**ing worms!
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RLMKnowlton
1:37PM Oct 12 2009
Keep the thermostats lower than normal, wear warmer clothing, use only what you really need to survive, nothing more. It is obvious that they are going to say anything at all to justify prices that are over inflated. I hope this weeks inventory reports show huge builds in every kind of petroleum product. I hope that this winter winds up one of the mildest on record. Conserve, conserve, conserve folks. Eventually, supply and demand will be extremely hard to ignore. Let's help make it that way and use less than ever before. Let's get together on this and help to bury their greed.
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