Today’s fuel price musings - Is oil marching to $50 a barrel?

Add comment January 5th, 2009

Looks like it, as it’s closing in on $48 today. There are several possible reasons, says Phil Flynn:

• The Russian-Ukraine conflict over natural gas.
• The Israel-Gaza conflict, and Iran’s call on oil producers to withhold oil in response.
• The threat of *another* OPEC production cut in February.
• General optimism about the economy with the new year, and a sense that there’s a lot of investing money on the sidelines looking to buy something.

He’s not sure $50 will hold, but I personally think it will - there are too many negative factors going on,  and at some point the market is going to have to jump on that, no? Though Mr. Flynn is far more experienced and knowledgeable than I am. We’ll see what happen.

Gas prices are up all over northern Illinois. Here’s the damage (courtesy of AAA’s fuelgaugereport.com):

Gasoline: Rockford rose almost five cents to $1.83 a gallon, the highest it’s been in more than a month. We have the second-highest gas prices in the state and we’re tied as the 55th-highest of the nation’s 250 metro areas. The Illinois average rose three cents to $1.81. The national average rose more than a cent to $1.67. Illinois has the ninth-highest gas prices in the nation, including the District of Columbia. Only Alaska and Hawaii remain above $2 a gallon.

Diesel: Rockford dropped almost three cents to $2.42 a gallon. We have the fifth-highest diesel prices in the state. The state average dropped a cent to $2.52. The national average dropped almost a cent to $2.40. Illinois has the 14th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.