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Despite relatively good news regarding world wide inventory levels, the price of crude oil continued to rise today, closing at $55.37, up $.33 from yesterday’s close. Today’s closing price represents the highest closing price in over a week.
It appeared that prices were going to head lower for the day as prices dropped nearly $1 when trading opened, however the drop was short lived thanks to several noteworthy news items:
- During President Bush’s State of the Union address, he asked Americans to reduce their gasoline consumption by 20% over the next decade by introducing more alternative fuels into the mainstream.
- In addition to the gasoline consumption, Bush laid out plans to begin switching to energy sources other than oil (nuclear, coal, etc.). Also, Bush announced plans nearly double America’s strategic oil reserves to over 1.7 billion barrels.
- Continued dropping temperatures throughout the eastern third of the United States, as well as several forecasted snow storms across the entire country.
- The appearance that OPEC is actually following through on their 1.7 million barrel per day oil production cut, as well as increased fears that they will enact further cuts now that oil was able to fall below $50 per barrel.
Amazingly, despite the 10% run up in the price of oil, gasoline prices have remained relatively stead at $2.16 per gallon. According to Gasbuddy.com, there are still 11 states reporting average gas prices below $2, which is up from eight states a week ago.
