The Department of Energy reported Wednesday that crude oil stocks declined
by 4.5 million barrels to 269.8 million barrels last week. It was the lowest
level for crude oil inventories since 1975 and below what the agency terms the
"lower operational level," under which supply constraints could begin to
affect refinery operations.
On the New York Mercantile Exchange, nearby March crude oil futures settled
at $36.36 a barrel, the highest settlement since Sept. 20, 2000. Just before
the market closed, March crude hit a high of $36.40 a barrel.
"It's a combination of tight stocks and the threat of war," said Phil Flynn,
an analyst at Alaron Trading Corp in Chicago. "We're very close to going to
war, and if Blix comes down hard on Iraq, the chances for war are greatly
from dow jones wire service 2/13/2003
The fluctuation of the price of gasoline does involve the current price of oil as well as the refining cost which are affected by the price of other products made out of a barrell of oil. The major oil companies are reporting earnings below expectations and their price per share is sitting at a five year low for most. With $36.00 oil you are getting a bargin for any gas below $2.00.
As far as natural gas is concerned, the producers have drilled very few wells over the last two to three years and supplies have dwindled as consumption has increased. This winter has been 30% colder than the year before and we have depleated all the excess gas we had in storage. It takes some time for the producers to vamp up drilling to bring the supply back up to the demand level so expect to have high natural gas prices for some time.