Oil Woes Continue To Plague The U.S.

Crude oil climbed higher yesterday, breaching the $68 per barrel mark. Most of this was due to a gasoline supply concern in the United States as inventories were reported to be lower than expected for the coming summer demand. The question is, at the current prices, how much of an extra demand will we see? Adding to the higher prices is the fact that refinary output was lower than it had been. While this is not unexpected due to a normal practise of effecting repairs and other work prior to the summer demand, investors feel that the refinaries are not increasing their productivity fast enough to meet the future demand in the coming months.

Oil futures did dip early in trading, moving down closer to the $67 per barrel mark as investors decided to make a quick buck on the recent upwards trend. Also helping to ease supply fears is the fact that Nigeria has picked up production again and should return to their normal output sometime next month. OPEC's Edmund Daukoru also said that 1) there is a 1.9 million barrel surplus of oil a day, 2) that there are no plans to curtail the current production level and 3) that he favors the mid $50 oil prices over the mid $60 that we are currently seeing.

Articles used for this posting:
Oil Falls From Two-Month High as Nigeria Supply May Increase
Oil Rises as U.S. Gasoline Supplies Slip, Refiners Cut Output
Crude Oil Prices Fall on Profit Taking
Oil Falls From Two-Month High as Recent Gains Seen Unjustified

technorati tags: oil, oil supply, economy, gas, OPEC, Nigeria