Oil Prices Drop Below $55
January 25th, 2007 | by Brian Carr |Despite a relatively strong start to today’s trading session, the price of a barrel of crude oil fell over $1 to close the day at $54.23. It now appears that oil will be range bound between $50 and $55 per barrel for the foreseeable future.
Today’s price drop can be attributed to several factors: traders taking profits after oil’s recent 10% run up and the belief of many analysts that OPEC will not only not seek further daily oil production cuts, but that they won’t even fully go through with the planned 1.7 million barrel per day production cut.
In addition to the two reasons mentioned above, there’s also a U.S. government report which was released Wednesday that showed continued increases in inventories of natural gas and distillate oil. On top of that, there are weather forecasts that show the recent cold spell in the eastern third of the United States may be taking a bit of a break (at least for this coming weekend).
It now appears that the recent run up in the price of oil is beginning to hit gasoline prices. During the last 24 hours the national average price of a gallon of regular unleaded gasoline has increased by nearly two cents per gallon.
Once again, it looks like gas prices will shoot up with the price of oil, only to fall back down like a balloon.
