Oil prices are again rising and prices at the pump are back up over $2.00 per gallon in many parts of the country. This despite a report this morning from ADP indicating 742,000 jobs were lost in the United States during March 2009. With the economy effectively in a free fall you have to wonder how oil prices can continue to rise.
Looking at the supply side it was reported this morning that OPEC countries did not even come close to fully complying with requests to cut production. Instead some 3 million barrels of oil above the quota were produced recently. Here in the United States crude oil supplies rose by 2.8 million barrels topping expert opinions by 500,000 barrels. Inventories are up for the last month which only supports the fact that our economy is in shambles. Hammering the point home further gasoline stocks were up 2.2 million barrels when they were expected to fall by 1.2. So much for expert predictions as they were once again clueless. Heating oil and other products increased by 200,000 barrels versus an expected drop of almost a half million barrels. The full EIA Inventories Report is available on-line.
This begs the question of how in the world we are seeing rising prices in the heating oil and gasoline markets? The answer is simple as speculators and fund managers flock to commodities to make money. There is no economic basis for what we are seeing, supplies continue to rise capacities at our refineries are nowhere near maximum and worldwide demand is weak. GasBuddy.com among other sites will help you save a few dollars as you find lower priced alternatives.
Prices are down across the board today but I wonder how long it will take those in power to realize oil prices and in the end gas prices had a huge hand in the economic collapse in terms of consumer spending which coupled with the financial meltdown made a bad problem a historic problem.
