Oil hits $82 per barrel

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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 rose $2.25 to settle at $81.37 a barrel on the New York Mercantile Exchange. Prices hit $82 at one point.

Gasoline futures spiked and Brent crude rose $2.45 to settle at $79.69 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.

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.

There are concerns that spiking energy prices could stunt any economic recovery in Europe and the United States.

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Fish Out of Water
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Fish Out of Water 10/22/09 - 09:18 am
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For those of you who thought

For those of you who thought that last summer's $140 oil prices were a fluke, open your eyes. All of the elements that caused the spike then are still there now, and waiting dormant for the economy to return to pre-recession form. Cheap oil is something we'll now see only in the history books. It's time to conserve and focus on the alternatives, or continue to hemorrhage money to the oil companies and OPEC nations.

mar_1081
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mar_1081 10/22/09 - 02:50 pm
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Oh goodness! It is people

Oh goodness! It is people who speculate that cause the prices to go up. Oil companies are not planning on seeing $140 again! Trust me - I work for one! Most people within my company seem to think that the price will level off at $90.

The elemest are still here and have always been here - including in the 80's when they had the oil bust and Houston became a ghost town.

Conservation is important but so is exploration and production. People who do not know the oil industry (think 99% percent of congress) should not be allowed to make the laws and regulatiosn that govern the industry.

scorehouse
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scorehouse 10/22/09 - 05:01 pm
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the price of oil is subject
Unpublished

the price of oil is subject to supply and demand. not only the supply and demand for oil but also the supply and demand for the US dollar. the current administration in collusion with congress decided to print dollars to rescue the economy. it has failed miserably. all actions have consequences. the consequence is that the producers of oil and china have so many dollars in reserve they are becoming worthless. if these nations demand payment in gold we are in deep dodo. but let's not drill here. we'll print more dollars and give it out looking for the new alternative energy supply. do you realize that everything you rely upon daily is petroleum based? heating, cooling, food you eat, medicines you take, computers you use, every household item needed oil to be made or delivered. why are we so stupid about this?

FallingLeaves
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FallingLeaves 10/22/09 - 06:42 pm
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The prices went up right

The prices went up right after the cold snap up in the Northern states hit. Supply and demand, it was an early hit on supplies because of an earlier than usual need for heating oil.

Fish Out of Water
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Fish Out of Water 10/22/09 - 07:25 pm
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recession = lower demand.

recession = lower demand. supply being equal, prices will increase as the recession eases. supply and demand.

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