Oil prices hit new highs for the year Wednesday just as the dollar fell to new lows against the euro, showing how much the weak U.S. currency has come to dominate energy markets.
Benchmark crude for December delivery jumped more than 3 percent, or $2.71 to $81.83 a barrel on the New York Mercantile Exchange. It got as high as $80.70.
Gasoline futures spiked 4 percent and Brent crude rose $2.48 to $79.72 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 growing 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 rising crude prices that wipe out profit margins.
That can have real consequences at the pump. The government reported Wednesday that gasoline supplies fell by more than 2 million barrels last week.
There is usually a lag between the direction of crude bought and sold on Nymex and the price that people pay for gasoline to fill up their cars.
Crude began to rise on Oct. 7, when a barrel cost less than $70. Prices moved higher for eight days in a row, nearly reaching $80.
Average retail gasoline prices started ticking higher one week later and a gallon has increased every day since, up about 12 cents in one week to $2.596 on Wednesday, according to auto club AAA, 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.
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5 comments:
Print more, and watch them become worthless!
It was time for gas to go way up again or something. They needed a "distraction". So what's happening in Washington right now while we're all focused on rising gas prices???
This is how they do it in Washington.
THE dOLLAR IS GOING DOWN, TAXES ARE GOING UP AND WE STILL WONT DRILL. NOW THAT'S HOPE AND CHANGE, CURTESY OF THE DEMOCRATS.
still have the $2.50 per gallon. no change in the near future. no jobs in the near future. seems like its getting worst.
I just find it totally amazing that when Crude goes up the price instantly rises 10 - 20 cents a gallon, but when it goes down in price it takes about 3 weeks for it to go down 5 cents. GREED is what is is all about!!!
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