Oil Price Soars above $145 per Barrel

Nobody, even OPEC can stop oil price from increasing. To date, oil is at above $145 per barrel. What comes next after this tremendous increase in oil price?

Prices might have raced even higher Thursday were it not for the sharp gain by the dollar against the euro. "The strength in crude oil is amazing given the price of the euro," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

The slumping dollar has been a key driver pushing oil prices up by half this year. Many investors buy commodities such as oil as a hedge against inflation when the greenback weakens, and a falling dollar makes oil less expensive to investors overseas. When the dollar strengthens, traders have less incentive to buy commodities.
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Oil Is Staying High

International Energy Agency's monthly report said that consumers should not expect relief from the present sky-high oil prices. Will oil price continue to soar?

That means the balance of growth has to come from OPEC, which has been unable and/or unwilling to increase capacity fast enough in recent years to keep up with increases in demand. In fact, OPEC's spare capacity—the extra crude it could produce if necessary—has dwindled back below 2 million barrels per day for the first time since the third quarter of 2006, the IEA says.

That will likely make the hair-trigger markets even more sensitive to potential outages that could be caused by hurricanes on the U.S. or Mexican Gulf Coast, or political tensions from Iran to Nigeria. "Higher prices are needed to choke off demand to balance the market," the IEA said. On cue, U.S. crude, which had declined on June 9 following the June 6 record of $139.12, rose by 2.26%, to $137.00 per barrel, Reuters reported.

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Rising Oil Price Is Hurting Consumers

What would you expect from the oil consumers if its price is no more than the usual? Definitely, they would be infuriated! Costly gas price would mean budget cutting for them.



Despite oil negotiations made by top leaders around the world, still, oil price cannot be stopped from rising. This makes every householder be forced to tighten their budgets, including personal budgets.

The situation could get worse soon. Prices at the pump have been pushed to levels many couldn't conceive of even a year ago, and analysts and the Energy Department are both expecting the cost of gas to rise even further this spring and summer.

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