Oil prices bounce up and down this morning even after the U.S. Dept. of Energy announce a rise in inventories this morning. While light sweet crude dropped below the $48 mark immediately following the announcement, it quickly bounced back up to 20 cents over its opening price and then back down slightly to 15 cents at $49.35. Brent is trading down 27 cents at $50.25 and gas is down almost 2 cents $1.44 a gallon.
The price fluctuations come this today after the Department of Energy announce and increase in crude inventories of 2.6 million barrels up a significant 9% over last year’s inventories. Gasoline levels rose over 2.2 million barrels as well.
The inventories continue to climb as OPEC continues to pump out near capacity levels in an effort to curb the rising prices at the pump. Pump prices have been running over $2.20 a gallon right before the summer driving season begins and during holiday weekends like Memorial Day coming up, gas companies usually spike the price a bit anyway so its quite possible pump prices could hit $2.50 a gallon that weekend.
A number of factors have fueled the rising costs of oil, which peaked in early April at $58.28 a barrel. Recent terrorist attacks in Egypt and Saudi, the continuing insurgency in Iraq and refinery problems in the U.S all contributed to the problem that has hampered economic growth and pushed up inflation in the U.S.
But for several days now, oil prices have continued a downward movement. Much of this is attributed to the slowing economy in the U.S. The Fed kicked up interest rates a quarter of a point yesterday. Automakers reported SUV sales have gone down steadily. G.M. and Ford have both reported sales moving down.
John Stith is a staff writer for murdok covering technology and business.
