The price of oil once rose above the level of 100 US dollars per barrel. This time when crude oil prices crossed this important threshold, they may stay for some time.
With the economic recovery of the United States and other major economies, global oil demand is slowly growing. The world’s largest oil consumer, the US’s oil and fuel stocks, fell gradually from a 27-year high in September, while demand in Latin America and Asia continued to rise.
The rise in oil prices is slower than in 2007-08, but the price of oil is likely to continue rising.
Mark Waggoner, president of Excel Futures, Oregon, said that there is a merger of rising demand in all these countries. Here, there is a lot, if any, of these points.
Some large investment institutions are betting that oil prices will continue to rise. Goldman Sachs, JPMorgan (JP Morgan) and a growing number of large energy trading banks expect oil prices to rise above $100 a barrel in 2011 and stay steady. Wagner expects oil prices to rise to a high of $130 a barrel next year.
According to the US Commodity Exchange Commission (CFTC), since July, hedge funds and other ** managers have nearly doubled their net long position for betting on crude oil prices.
Investors still remember the last time oil prices rose above $100 a barrel. The rally ended in mid-2008, with crude oil prices approaching $150. However, in less than three months, the price of oil fell to less than 100 US dollars, and all the way down the recent five-year low. At the time when the economy was in recession, consumer spending, manufacturing, and global trade slowed, so that oil prices could not remain high.
This time economists and other market observers do not expect oil prices to collapse, partly because the global economy is trending stronger, but also because this time oil prices are gradually increasing. The 2010 crude oil price rose from 80 U.S. dollars per barrel to 90 U.S. dollars in one year, and by the end of 2007, this increase was completed within five weeks. This slow rise in oil prices has given consumers more time to adjust their family budgets. In addition, gasoline and home heating oil prices were higher two years ago, which has led people to re-evaluate how such a large price increase will occur.
Bill O'Grady, chief market strategist at Confluence Investment Management, said that as long as gas prices rise slowly, it is generally not a big problem. A major way that oil prices affect consumers is that US gasoline retail prices have only risen by 8.6% this year, and by the end of November, they have averaged 2.86 US dollars per gallon.
Despite the recent rise in oil prices, the OPEC Minister decided last weekend to maintain the same quota for oil output, suggesting that they would like to see oil prices rise to $100. OPEC, which controls one-third of global oil production, will not meet again until June 2011.
An official in OPEC, a leading Saudi Arabian official, said that before the organization increased production, oil prices above $100 a barrel would inevitably be accompanied by a sharp drop in oil supply.
With the economic recovery of the United States and other major economies, global oil demand is slowly growing. The world’s largest oil consumer, the US’s oil and fuel stocks, fell gradually from a 27-year high in September, while demand in Latin America and Asia continued to rise.
The rise in oil prices is slower than in 2007-08, but the price of oil is likely to continue rising.
Mark Waggoner, president of Excel Futures, Oregon, said that there is a merger of rising demand in all these countries. Here, there is a lot, if any, of these points.
Some large investment institutions are betting that oil prices will continue to rise. Goldman Sachs, JPMorgan (JP Morgan) and a growing number of large energy trading banks expect oil prices to rise above $100 a barrel in 2011 and stay steady. Wagner expects oil prices to rise to a high of $130 a barrel next year.
According to the US Commodity Exchange Commission (CFTC), since July, hedge funds and other ** managers have nearly doubled their net long position for betting on crude oil prices.
Investors still remember the last time oil prices rose above $100 a barrel. The rally ended in mid-2008, with crude oil prices approaching $150. However, in less than three months, the price of oil fell to less than 100 US dollars, and all the way down the recent five-year low. At the time when the economy was in recession, consumer spending, manufacturing, and global trade slowed, so that oil prices could not remain high.
This time economists and other market observers do not expect oil prices to collapse, partly because the global economy is trending stronger, but also because this time oil prices are gradually increasing. The 2010 crude oil price rose from 80 U.S. dollars per barrel to 90 U.S. dollars in one year, and by the end of 2007, this increase was completed within five weeks. This slow rise in oil prices has given consumers more time to adjust their family budgets. In addition, gasoline and home heating oil prices were higher two years ago, which has led people to re-evaluate how such a large price increase will occur.
Bill O'Grady, chief market strategist at Confluence Investment Management, said that as long as gas prices rise slowly, it is generally not a big problem. A major way that oil prices affect consumers is that US gasoline retail prices have only risen by 8.6% this year, and by the end of November, they have averaged 2.86 US dollars per gallon.
Despite the recent rise in oil prices, the OPEC Minister decided last weekend to maintain the same quota for oil output, suggesting that they would like to see oil prices rise to $100. OPEC, which controls one-third of global oil production, will not meet again until June 2011.
An official in OPEC, a leading Saudi Arabian official, said that before the organization increased production, oil prices above $100 a barrel would inevitably be accompanied by a sharp drop in oil supply.