Oil Prices Soar Above US$60 per Barrel
Published By : 05 May 2015 | Published By : QYRESEARCH
Oil prices in the United States soared above US$60 per barrel on Tuesday owing to geopolitical events upsetting the market. This is the first time the prices have surged over US$60 since December.
Prices rose on the news that protestors in Libya had obstructed a major port, which resulted in the interruption of over 100,000 barrels of crude production each day. The rise in Libyan crude production is a major force that has resulted in the oil market dropping more than 40 per cent last year. However, the output in the country continues to fluctuate owing to ongoing political unrest.
Later on Tuesday, oil prices went up further as Saudi Arabia increased the official price of its crude in the United States as well as in Europe, indicating a rise in demand.
Tuesday’s leap stretches the ongoing rally in prices of crude oil, which rose 25% last month. Investors anticipate that the global glut of crude oil will decrease in the latter half of this year because of a sharp decline in drilling activity, a rise in demand for crude oil, and an expected drop in crude production in the U.S.
The sharp increase in prices of oil has fuelled energy stocks, making oil and gas equities the best performing industry among the S&P 500 for this quarter. However, consumers are enjoying shorter savings at the pump. With a price of US$2.63 for every gallon of oil, retail gasoline cost 9.9 per cent more on Tuesday than a month ago. However, AAA said that this was still 28 per cent lower than the year ago price.