Oil tops $81, a jump in pump prices "could" follow

Discussion in 'Economics' started by S2007S, Aug 2, 2010.

  1. S2007S


    Who writes this garbage, its already known that prices at the pump ALWAYS follow the barrel of oil so why after a 3% jump in oil in one single day not push prices at the pump up. Take notice how quick prices at the pump push higher when oil is rising but when its sinking it takes weeks to adjust. I think if oil gets a slight push higher to $83+ it will be time to start going short oil with SCO.

    Oil tops $81, a jump in pump prices could follow
    Oil tops $81 a barrel on manufacturing data, stock rallies; jump in pump prices could follow

    Sandy Shore, AP Business Writer, On Monday August 2, 2010, 3:51 pm

    Oil prices rose 3 percent Monday on positive economic news and rallying stock markets. The jump above $81 per barrel could translate into higher pump prices ahead.

    The national average for a gallon of regular unleaded gasoline was $2.735 Monday, according to AAA, Wright Express and Oil Price Information Service. It's about 0.8 cent less than a month ago but remains almost 20 cents higher than a year ago.

    Benchmark crude for September delivery rose about 3 percent after positive reports on manufacturing in the U.S. and Europe indicated the global economy is continuing to recover. A rally in global stock markets also helped, as did weakness in the dollar.

    If oil prices remain above $80 a barrel, that could mean higher prices at the pump unless demand falls away with the end of the summer, said Rich Ilczyszyn, a senior market analyst for Lind-Waldock. Summer typically brings the heaviest demand for gasoline as vacation travelers join commuters on the roads.

    Oil hit a high for the year of $87.15 during trading on May 3 while the national average for gasoline peaked at $2.93 per gallon on May 6.

    Oil and gas prices will also react to the threat of a hurricane shutting in production in the Gulf of Mexico. The most active period of the season runs from Aug. 15 to Sept. 15.

    "Every hurricane or possible hurricane will send the prices up a few pennies and then dip back down assuming nothing major happens," said Michael Lynch, president of Strategic Energy & Economic Research.

    For now, how much gas prices rise will depend on the sustainability of the oil market rally, said Andrew Lebow, MF Global senior vice president and broker. Prices have risen for three straight days. He also pointed out that oil supplies remain plentiful.

    Manufacturing remains a bright spot for the global economy. A report in the U.S. showed the sector grew for the 12th straight month while a report from Europe indicated the continent's economy continues to recover faster than expected.

    Stock markets rallied on the news. Oil traders have been monitoring the markets for hints about consumer confidence. The Dow Jones industrial average rose 2 percent.

    Another factor that helped oil and other energy prices was a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them more attractive to overseas buyers.

    Benchmark crude for September delivery rose $2.39, or 3 percent, to settle at $81.34 a barrel on the New York Mercantile Exchange.

    In other Nymex trading in September contracts, heating oil rose 6.57 cents to $2.1538 a gallon, gasoline added 4.61 cents to $2.1685 a gallon. Natural gas fell 22.2 cents to 4.701 per 1,000 cubic feet.

    In London, Brent crude settled up $2.64 at $80.82 a barrel on the ICE Futures exchange.