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Crude oil prices soared on Tues to pass $90 a barrel, a 26-month high. Increasing oil and gas costs are being powered by both a declining money and falling temperatures. Other elements pushing up gas and oil costs include traders looking for a hedge against the weakening money and a deal reached Tues to extend the Bush tax slashes, which investors think will shore up economic recovery. Source of article - Rising oil prices driven by global weather, markets and politics by Money Blog Newz.

26-month high with oil prices

Tuesday, the prices for the West TX Intermediate (WTI) crude oil prices went higher than they have been since Oct 2008. The cost was $90 a barrel. WTI crude oil, also called Texas light sweet crude, is used as a benchmark in oil pricing and is the commodity traded as oil futures on the NY Mercantile Exchange (NYMEX). U.S. inventories went down while crude oil futures went up, the Energy Department reports. There is likely to be less demand especially thinking about over six weeks the oil inventories went down 40 million barrels. The National Climate Service accounts that the week ending December 11 called for 16.3 percent more heating oil in the United States than normal. The normal energy demand is going up in Europe too with such cold temperatures.

The way the Bush tax slashes impact oil prices

It seems as if an agreement may be made with Obama saying the Bush tax slashes could get extended a year right when WTI crude oil costs surge. Of course, in exchange, Obama would want payroll taxes cut by 2 percent in 2011 and an extension of joblessness benefits. Investors anticipate extending the Bush tax slashes will strengthen economic recovery, a good thing for oil costs and oil corporations. The reason why the crude oil costs have not been too bad is being hurt using the Federal Reserve monetary policy making it so the money is losing value. WTI crude oil futures have been bought by a lot of traders too trying to hedge against the declining currency making costs go up.

2011 gas costs absurd

In the last three months, wholesale gas futures have been pushed by speculators by 55 cents a gallon. National gas costs have risen more than 10 percent on average in the past week. U.S. customers can expect the pattern to continue. Soon, the cost of oil might go over $100 a barrel. This is because the oil price rise has not compensated for the loss in the dollar, according to the Iranian OPEC’s governor. Many of the energy analysts suggest that next year the gas prices will become high again. They might get near $4 a gallon.

Info from

International Business Times

ibtimes.com/articles/89539/20101207/crude-oil-breaks-above-90-as-obama-agrees-to-extend-tax-cuts-wti.htm

Bloomberg

bloomberg.com/news/2010-12-07/oil-trades-near-26-month-high-on-forecast-of-decline-in-u-s-crude-supply.html

Reuters

reuters.com/article/idUSN0732290620101207