PRICE OF OIL HITS RECORD HIGH; INVESTORS SEEK OUT
OIL AND GAS INVESTMENT OPPORTUNITIES
OKLAHOMA- (September 27, 2007) – Record oil prices are back, and investors are making moves in fear of rainy days ahead. For the second consecutive day, crude oil prices rose on the New York Mercantile Exchange, largely due to Tropical Depression 13, a storm the National Hurricane Center believes may strengthen as it moves toward Mexico, the third biggest oil supplier to the United States.
The situation nearly seems like déjà vu, as on September 20, crude oil prices peaked to nearly $84, before dropping to $81.62 on Friday, September 21 just after officials closed oil and gas platforms in the Gulf of Mexico in anticipation of an approaching tropical storm.
Currently, The National Hurricane Center is tracking Tropical Storm Karen, presently located a just over 1,000 miles east of the Windward Islands, and low pressure area just south of Key West, Florida which is expected to strengthen as it heads toward the Atlantic.
Investors are also keeping a watchful eye, and are looking for ways to cash in.
“The triggers have been storm watching in the Gulf of Mexico,� says Peter Luxton, a London-based energy analyst at Informa Global Markets.
While stormy weather plays a large part in the heightened prices, the rising price of oil is also due to the Federal Reserve’s interest rate cut, and the weakened U.S. dollar.
“The weakened dollar environment is definitely providing a general boost to commodities,� Luxton states.
As held by tradition, the U.S. dollar has influenced the price of oil as well as other commodities, namely because the Organization of Petroleum Exporting Countries (OPEC) is paid in U.S. dollars, while they typically spend Euros, a move created as an incentive to keep oil prices strong as the dollar declines.
With the price of oil up, Americans can expect to pay more at the pump, as oil accounts for more than half of the cost of making gasoline. After the rise in crude oil prices last week, U.S. retail gasoline prices rose an average of 2.5 cents to $2.81 a gallon.
On average, the national regular price of oil is up for $0.43 from a last year.
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