Energy Prices Rising

The cold weather has caused energy prices across the board to rise.

  • Light Sweet Crude: up $0.39 to $60.33 a barrel
  • Brent Crude: up $0.55 to $58.16 a barrel
  • Heating Oil: edged up to $1.7725 a gallon
  • Gasoline: increased to $1.5971 per gallon
  • Natural Gas: up $0.23 to $13.718 per 1,000 cubic feet.

The good news is that increased production and imports are likely to prevent large price spikes, but this tells me that prices are going to keep going up at a slow pace for the foreseeable future.

FILED UNDER: Economics and Business, ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Bithead says:

    Crude going up somewhat in price would be expected; once the refining capacity started coming online, stockpiles of available crude would start going down,a nd so prices rise, somewhat. Simple supply and demand, and no suprise.

  2. Herb says:

    Bithead:

    That don’t make a lot of sense. You said,

    “once refining capacity started coming on line,stockpiles of available crude would start going down”

    I have many, many times shown that there is almost a glut of crude available, so there is no reason for crude to be short. I just don’t buy the argument that “supply and demand” apply.

    The reason I don’t buy it is “The oil companies control” all the supply and they can then control the stockpiles. If stockpiles decline, then it is an oil company minipulation of supply that is causing prices to rise.

    As of 3:00PM today, the crude price is again below the 60.oo dollar per barrel mark. The market started to go up early today, but is now declining.

    I still think that the Senate hearings should Supoena the oil company execs and put them under oath as they threatened to do a few weeks ago. Then, we might get some straight answers. Remember, the Saudis still are producing a little over a Million barrels a day over demand and cannot find buyers.

  3. Noreaster says:

    Actually, it’s probably because demand is going up. Home heating oil is obviously up (yes, it’s winter) and more folks are driving more (gas prices going down). Natural gas has been going up for awhile (even before Katrina and Rita) because of ever-increasing demand for it (cleaner burning).

  4. Bithead says:

    Last report I saw had at-the-pump demand fairly steady.

    Then again, what gets craked for gasoline amounts to less than half the overall crude taken in a given period.

    And herb, I didn’t say ‘short’, I said shortER.\A major difference, and a subtlty usually lost on peple when speaking of comodity prices.

  5. Anderson says:

    Bithead, where did you say “shorter” or “short”?

  6. Herb says:

    bithead,

    You are right, you did not say short or shorter

    But, you did say “stockpiles of available crude going down”

    In my book, that means a short (or shorter) supply of crude.

  7. Bithead says:

    But, you did say “stockpiles of available crude going down”

    Yes, I did.

    In my book, that means a short (or shorter) supply of crude.

    Well, yes, and no. You’re taking it, I suppose, to mean enough to cause serious shortages. My suggestion to you is that prices will adjust long before serious shortages are an issue… in any commodity.

  8. Herb says:

    bithead:

    While I agree somewhat with you, If we are NOT in a “serious” shortage situitation, then why are prices going up. It seems to me that prices would only when there is an “Actual Serious” shortage.

    As I stated previously, THERE IS NO CRUDE SHORTAGE.

  9. Bithead says:

    You may notice that as of this morning, prices were down sharply.

    So, Herb, to answer your question a bit more fully, this is part of the comodity trading game…. driven as much by perception as fact.

    The short spikes we see are driven, as much as anything else, by what are seen as possible shortfalls in the future. Reasons for these are the cold, and the aforementioned refining capacity coming back online, as well as other reasons neither one of us has brought up.

    The press (And some bloggers) tend, collectively to wet it’s pampers every time there’s a short term spike, anymore, because it wants to create the image of the economy going to hell in a basket. Note the utter lack of hype over price DROPS, as occured before the closing bell yesterday.

  10. McGehee says:

    If we are NOT in a “serious” shortage situitation, then why are prices going up.

    Do prices only go up when there’s a “‘serious’ shortage situation”? Or do they move because the current relationship between supply and demand has changed just enough for sellers to make adjustments?