I hate it when I am right. Apparently while most of us were cheering for the continued drop in oil prices, here we are again back to square one. The price of crude oil once again hit the $120 per barrel mark, a sign that fuel prices will once again be back to the same crazy price we had some months back.
This was something that was feared but meant obviously to happen. For sure it has a bearing on the current financial crisis hitting the United States as the dollar continues to slip. The price of crude oil jumped by nearly $25 and settled at $120.92 per barrel, a significant jump since 1984 as far as oil price jumps are concerned.
Another reason for this is the fact that the bail out plans which President Bush had announced seemed to have further affected the economy, already in a state of question as people continue to question the interference of the government with the fiscal crisis as well as the real value of capitalism.
From the looks of it, the U.S. is indeed in a deep hole right now. One blunder after another, who knows what is at stake.
We can see from this development that many sectors are not at ease with the efforts of the government as far as prying away fears of recession. With this development, we are further pushed towards possible recession and business breakdown.
Well, sorry to be a kill joy, but oil prices are expected to be back to their old high prices. So where are the alternative fuel studies that everyone shelved? The worst is yet to come and sadly, another reality on proper business trends and analysis has come true.
Crude oil futures jumped by nearly US$25, or more than 20%, to cross a intra-day high of US$130 a barrel, shortly before the close. Crude for October delivery settled on a gain of US$16.37 a barrel or 17% to end at US$120.92 a barrel – still their biggest daily gain in dollar terms since 1984.
In the last four days, oil prices have risen by a whopping US$29. The dollar also weakened on Monday, spurring demand for various commodities, as investors sought a hedge against currency fluctuations. Gold, silver and copper all posted strong gains.
Monday’s volatility in the oil market was worsened by the fact that the October contract expired at the end of the day. Prices tend to rise when a contract is scheduled to expire as traders rush to cover positions.
(Source) India Infoline
[tags]crude_oil_futures, currency_fluctuations, price_of_crude_oil, price_jumps, crazy_price, dollar_terms, fiscal_crisis, oil_market, alternative_fuel, gold_silver, fuel_prices, oil_price, business_trends, blunder, oil_prices, president_bush, volatility[/tags]
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