Oil Hits $82 per Barrel

Oil prices reach new highs for the year just as the dollar drop to new lows against the euro, showing how much the weak U.S. currency has arrive to take over energy markets.

Benchmark crude for December delivery raised $2.25 to stay at $81.37 a barrel on the New York merchant exchange. Prices hit $82 at one point.

Petrol futures spiked and Brent crude raised $2.45 to stay at $79.69 on the ICE Futures exchange.

The run-up in prices came within minutes of a government report showing that crude supplies in the United States are increasing and that refiners are producing very little gasoline because consumers aren’t using as much.

“The dollar obviously is the overriding factor,” PFGBest analyst Phil Flynn said. “It’s not about demand I can tell you that.”

Refiners are shutting down plants, a combination of little demand and increasing crude prices that wipe up profit margins.

That can have real consequences at the pump. The government reported that gasoline supplies fell by more than 2 million barrels last week.

There is usually an interval between the direction of crude bought and sold on Nymex and the price that people pay for gasoline to fill up their cars.

Gross began to rise October 7, when a barrel cost less than $ 70. Price increases were higher for eight consecutive days, reaching almost $ 80.

Average price of retail gasoline began ticking over a week later and a gallon has risen every day since, up about 12 cents in a week to $ 2.596 Wednesday, according to AAA Auto Club Wright Express and Oil Price Information Service.

A gallon is still 29 cents less than last year at this time when gas prices were in full retreat.

There are fears that soaring energy prices could stunt any economic recovery in Europe and the United States. Energy Secretary Steven Chu said Tuesday that crude oil prices to $ 80 a barrel right now is disturbing.

Even if the amount of crude in storage is well above normal for this time of year, it seems every movement of the dollar draws more money. Crude oil is priced in dollars, so it becomes cheaper when purchased with yen, euro, pound, or any other currency advances against the dollar.

The dollar has lost 16 percent of its value since March and Wednesday, a person holding a Euro could be exchanged for $ 1.50.

Gasoline demand has increased over the last four weeks compared to the same period last year, but it is important to note that a pair of nasty hurricanes sent prices of gas doping in parts of the country and then the crisis on Wall Street was in full bloom.

Flynn said the combination of interest rates historically low combined with government attempts to stimulate a weak economy recession helped oil prices higher than the reader otherwise, given the glut of crude. This, in turn, could prove a drag on the economy as gasoline and heating oil costs this winter.

“At what point are consumers going to be feeling the pain?” He asked.

In other Nymex trading, heating oil rose 5.8 cents to $ 2.1053 a gallon. Gasoline for November delivery added 6.66 cents to settle at $ 2.0543 a gallon. Natural gas for November delivery gave up 6.1 cents to $ 5.10 per 1,000 cubic feet.

Source : Associated Press