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| Originally Posted by Codger The actual 100/bbl is just a blip and it received some attention. The blip itself is of no consequence in and of itself. That it got the press and attention that it did suggests that there was some surprise at the price finally getting there. I doubt that anyone outside the US was surprised by it. The real price of oil hasn't risen much recently, it's just that the commodity used for the most part in exchange, the US$, for oil has lost quite a bit of it's value over the past year.. |
...depends on how you define 'recently'
Trading below $51 a barrel less than 12 months ago, crude prices hit their first in a fusillade of all-time highs in July and never looked back.
While some blame the frothy crude market on speculation rather than the simple rules of supply and demand, the only force that managed to slow prices down at all this year was fear of an economic slowdown, as oil fell below $90 a barrel just weeks after hitting a record
The year 2007 began quietly enough, with oil prices at $61.05, comfortably below the previous record of $77.03 set July 14, 2006.
It fell to a low of $50.48 on Jan. 18 only to begin an upward climb, cracking $60 on Feb. 21 and $70 on June 29.
On July 31, the first of several all-time records began rewriting the books with a closing trade at $78.21, up $1.38, on the heels of a six-year high in consumer confidence.
"What's great about this rally is that it is being driven by good economic news and not some type of bad news -- no hurricane, war -- just good old fashion demand and rising demand expectations," Alaron Trading Senior Analyst Phil Flynn said at the time.
The next record of $78.23 came on Sept. 11 after OPEC moved to boost production by 500,000 barrels, amid doubts that the group could actually achieve the increase. Six out of the next seven sessions saw fresh records amid speculation over recession, OPEC and other issues.
Oil broke through $80 for the first time on Sept. 13. It continued setting records in subsequent trading days until hitting $83.32 on Sept. 20 on jitters about refinery shutdowns in the Gulf of Mexico as the 10th storm of the Atlantic hurricane season bore down.
That record lasted less than a month, until oil jumped to $83.69 on Oct. 12, and then rose another $2.44 the next trading day to close at a fresh record of $86.13 on Oct. 15. The rise still wasn't over, as records fell at $87.61 on Oct. 16 and $89.47 on Oct. 18.
With the dollar weakening against foreign currencies, oil staged yet another rally within a couple of weeks, breaking through the $90 barrier on Oct. 25 and hitting $95.93 a barrel on Nov. 2.
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Brian added: OVERALL ...$61 to $100...thats quite an increase in one year !!! Enough to affect one's economy quite a bit. In fact so rapid it may not have fully digested itself.
I suggest that a whole lot of American consumers have just bitten the bullet and added these extra fuel charges to their credit cards. But what happens when they start cutting back on spending for other items?...
consumer spending in America is a huge driving force of our economy. Cut it back substantially and the economy will follow.
How about all of the freight companies and airlines that have just 'absorbed' this fuel increase without really raising there rates,YET...it's coming.
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Eric Bolling, an independent oil trader at the Nymex, said conditions that led to a record-breaking year will likely persist over the next 12 months at least.
"It's a weak dollar, it's a strong global economy, it's China growing quickly at 13%," he said. "It's been a perfect storm for a commodity bull run. That's going to continue to go. There's no signs of its slowing down, by any means."
He sees oil ranging from $60 to $120 a barrel next year, with spikes as high as $130 or more in the case of a major hurricane or geopolitical flare-up.
"Oil is going to be very volatile," he said. "It's an election year, there's going to be a possible recession..."
That could translate to gasoline prices of about $4 a gallon by the time the hot summer driving season arrives, he said.