Oil prices on the global marketplace rose by $1.86 cents a barrel, or more than 2 percent, yesterday after the presidential oil spill commission recommended more government action to improve safety in the Gulf of Mexico. According to published reports, the commission's conclusions raised fears that the government might slow oil production from its already depressed levels.
Other factors also could have had an impact on the price yesterday. Foul weather along the East Coast, the closure of the Trans-Alaska Pipeline, and the government's latest crude oil demand and price predictions could have added to the upward pressure on the price, which closed at $91.11 yesterday on the New York Mercantile Exchange.
By and large, the fundamentals of supply and demand are the most important influences in crude oil prices. And history has shown that gasoline prices tend to track crude oil prices. Yesterday the nationwide average price of gasoline stood at $3.093 a gallon, according to AAA, which is nearly 24 cents a gallon higher than on November 29, 2010. Since November 17, crude oil prices have risen more than 25 cents a gallon.
In its Short-Term Energy Outlook, the U.S. Department of Energy's Energy Information Administration (EIA) raised its world oil demand forecast for 2011 by 20,000 barrels a day from its previous projection. The agency now expects global demand to increase by 1.7 percent to 88.02 million barrels per day, compared with 86.57 million barrels per day last year. It also projected that the price of crude oil will average $93 a barrel, which is more than $14 over the average price in 2010.
The latest supply and demand figures compiled by API show gasoline demand climbed by 3.2 percent in November, while gasoline production continued at near record levels. API will release its supply and demand statistics for December and 2010 on January 21.