Oil prices surged higher than $86 a barrel Monday for the first time after OPEC said crude production by non-member countries is likely falling even as global demand for oil is rising.The rise in oil prices will most surely make it even more likely that the U.S economy will tip into a recession. The housing collapse is being felt in many other industries and the rise in gas prices will also spill over into other industries. This double whammy will have a very damaging effect on the economy. It is time to spend money on alternate sources of energy not on invading countries that have the oil.
The price for light sweet crude settled at a record $86.13 a barrel, up $2.44 from Friday's $83.69.
Prices were also supported by concerns Turkish forces will pursue Kurdish rebels into Iraq, disrupting oil supplies, and by technical buying by investment funds.
Monday's intra-day high was $86.20 a barrel, breaking Friday's peak of $84.05.
Despite the Organization of Petroleum Exporting Countries' decision last month to boost its production by 500,000 barrels per day beginning next month, the rest of the world will likely produce 110,000 fewer barrels of oil per day than expected in the fourth quarter, OPEC said in a report.
At the same time, fourth quarter demand for crude oil will grow by 100,000 barrels a day over last year, OPEC said.
The estimates add to sentiment that crude supplies are tight. Last week, the Energy Department reported that domestic crude inventories fell during the week ended Oct. 5 when they had been expected to rise. And the International Energy Agency concluded that oil inventories held by the world's largest industrialized countries have fallen below a five-year average.
Monday, October 15, 2007
Oil Tops $86.00 Per Barrel
Crude prices reach record high on worries about declining oil inventories, OPEC says production by non-member countries may fall; Turkey-Iraq tension.