As I noted here early this morning, the media was reporting “Cost of crude oil ends year 57 percent higher.” We’re all feeling the pinch. But that pinch is going to get worse and today, OIL hit $100 a barrel for the first time. Ouch!
Crude oil futures for February delivery hit $100 on the New York Mercantile Exchange shortly after noon when a single trader bid up the price by buying a modest lot and then sold it immediately at a small loss. Prices eased somewhat in later trading, settling at $99.62.
But while the trader was apparently looking for vanity bragging rights, the spike in crude prices of $3.64 for the day reflected deeper worldwide trends, including the surge in energy demand from China, India and the oil-producing countries themselves.
“We’re starting the year with a bang,” said Fadel Gheit, senior energy analyst for Oppenheimer & Company. “It’s the same usual suspects: the bad, bad world out there, a cold winter and declining oil inventories.”
And just what is ahead for consumers as oil prices continue to be on the rise?
“We’re going to see sharply higher gasoline prices this spring, we’re going to see sharply higher heating oil and diesel prices immediately,” said Tom Kloza, chief oil analyst at the Oil Price Information Service. But he added, “If I had to bet what we would see first, $115 oil or $85 oil, I’d bet $85.”
Bundle up and don’t drive. That’s the short fix. The longer fix is vote Democratic in the primaries and general election this year and put someone in the White House who actually cares about the American public and the economy.
In related news, Bloomberg reports a surge in commodities along with the record oil price and also a record gold price today. Michael Fitzpatrick, vice president of energy risk management at MF Global Ltd. in New York, said in an interview on Bloomberg Radio today, “It’s a very, very big bubble. The higher energy prices go, it’s going to eat into every aspect of the economy and consumers are going to start to pull in and curtail their spending.”