Oil Passes $100 Per Barrel
For the first time in more than 2 years the price of oil has topped the $100 per barrel mark and topped out at $103.41. The price is the WTI Crude delivery for April 2011. Brent crude in London also peaked today at $116.99.
Because instability is spreading across the middle east and into oil rich countries, investors are banking on expensive oil. Also, many countries involved in oil production in Libya and other countries in the Mideast are pulling out of their operations thus driving the supply of oil lower and the cost higher. For example, Italy's Eni oil company suspended its operations in Libya that produce 244,000 barrels per day and Germany's Wintershall oil operations shut down its facilities that produce upwards of 100,000 barrels a day.
Libya produces 1.6 million barrels per day which is only 2% of daily world output however, the fear is that turmoil may spread to the super producer oil nation of Saudi Arabia causing the price to skyrocket. To alleviate possible rioting and upheaval amongst Saudi citizens, the royal family has promised to pay every citizen some $3,000 each. It seems as if this money just materialized out of this air and one has to wonder why there is much cash laying around to pay off the masses.
The per barrel price is obviously also effecting the at he pump price in the United States and all over the world. In Central Florida prices for regular have gone from $3.08 per gallon to $3.15 a jump of 7 cents in a day. However, I haven't checked the current price at the pump today, so it may have gone higher.
As of the current time of this post, oil has now gone down below the $100 barrier and is at 99.39. Since fighting started in the middle east oil has gone up some $15 a barrel, but analysts expect the price to drop if Gadhafi (there's probably a million ways to spell his name) is to resign. No telling what will happen if he is killed as this may cause additional turmoil and chaos.