Oil Prices Drop, Hold Above $61
December 13th, 2006 | by Brian Carr |Thanks to the belief that OPEC will not decide to increase daily oil production cuts, the price of a barrel of crude oil fell $.20 today to finish trading at $61.02.
After the price of oil fell nearly 30% from this summer’s record highs, OPEC’s chief goal has been to protect a price floor of roughly $60 per barrel. After OPEC’s initial round of daily oil production cuts were announced back in mid-October (which amounted to roughly 1.2 million barrels per day), oil has traded in a much tighter range, between $58 and $63 per barrel.
Additionally, the fact that the United States has experienced a relatively mild start to the winter season has helped to push oil prices downward.
However, one significant item that could force OPEC into escalating the production cuts is the fact that world wide inventories of oil reserves continue to increase steadily. According to the International Energy Agency, world wide inventories are currently 4.5% higher than at the same point last year.
Despite the drop in oil prices, the average price for a gallon of regular unleaded gasoline has remained steady at $2.30 per gallon.
Unfortunately, this might end up being the low point, as gas prices traditionally begin to rise coming out of the holiday season.
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