Oil Surges Above $81, Driven by Several Factors

The New York Times ^ | January 4, 2010 | Clifford Krauss

[Cheap_Hessian]

HOUSTON — A combination of frigid weather, expectations of an improving economy and new tensions between Russia and Belarus catapulted crude oil prices above $81 a barrel on Monday. Oil settled at $81.51 a barrel, up $2.15 in New York trading.

But most energy analysts said it was too soon to predict that prices would go much higher or even remain at current levels.

Energy markets are beginning the year with a string of reports that could help push prices higher. Traders took reports of increased manufacturing activity and passenger car sales in December as signs that the economy was on the mend. Meanwhile, India reported a substantial increase in oil imports.

The eighth consecutive trading session of rising prices was also attributed to nervousness over reports that Russia might charge higher prices and raise export taxes on oil sent to Belarus for refining for European markets. And heating oil futures rose to the highest level in over a year as cold weather was reported across much of Europe, China and the United States.

Still, analysts pointed out that oil prices had been see-sawing within a relatively narrow range from $70 to just above $80 a barrel since the end of July. The last time prices sprang above the $80 threshold was in October, before dropping again to as low as $70 a month ago.

Oil prices have gradually revived since mid-December, and gasoline prices have followed, rising 6 cents a gallon in the last week. The national average for a gallon of regular gasoline was $2.66 on Monday, about a dollar over the price at the beginning of 2009 when the economy appeared to be in a tailspin.

[massgopguy]

Bush’s War for Oil????????????

[ColdOne]

Had this been Bush everyday it would have been headline news. Nothing now..

[Revel]

Nothing in there about bankers using free tax payer dollars to speculate on oil?

[q_an_a]

If you look at oil use and oil inventories gas should be about 50% of what it is today. Crude imports are down 1.6 million barrels PER DAY over the same time last year (2008) which was a really bad year. Refineries are running at 80% well below normal - 90% and there are 5 million more barrels of gasoline in stock now than in 2008. The price should be no higher than 2008 but it is up more than 99 cents per gallon...hedge fund and bank speculation. Thanks Obama and the RAT congress. What happened to drill baby drill?

[Eric in the Ozarks]

Refineries are not reporting actual runs. I'd say their at 70-80 percent and the recent expansions are cold to the touch.