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Crude Oil Soars to New Record: $61.40

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Light sweet crude on the August contract exploded beyond the previous record to $61.40 a barrel. Gasoline and heating oil shot up right behind it at $1.80 a gallon. Dennis and Cindy hold the world oil market in their grasp.

These prices are driven by fears of major supply interruptions from the offshore oil platforms in the Gulf of Mexico. Most of the rigs were evacuated yesterday and as many weather watchers predict Dennis could quite easily become a full-blown hurricane, workers probably won’t return to the rigs until next week. According to the U.S. Minerals Management Service, gas and oil daily production in the Gulf is down 3%, driven down by the storm.

Crude Oil Soars to New Record: $61.40

Refineries also play into speculative fears as most refineries are pumping near capacity. Many feel these refineries are aging and susceptible to breakdowns that would severely hamper what most already consider a bottlenecked supply of oil in the U.S.

There’s also some speculation that once the U.S. is done in Iraq, they may head home via the Tehran highway and if that happens then the oil prices will skyrocket over $80 a barrel.

Demand in the U.S. remains very high with consumption up significantly over last year. As prices at the pump continue to climb, many continue to ask where will it stop. Today’s price hikes may not be the end of it either as the weekly Reuters survey of energy insiders showed they expect crude inventories to drop about 1.2 million barrels.

OPEC said they’ve taken increasing production off the table for now essentially saying that adding 500,000 barrels a day will have no appreciable effect as long as oil remains bottlenecked at refineries.

The oil and gas business are most definitely a seller’s market right now. Amazingly enough, consumption continues to climb and the prices go right behind it. With record sales with GM, including many trucks and SUVS, it doesn’t look like gas consumption will drop either. Probably those most hurt by this will be those commuters who don’t have the benefits of mass transit who drive an hour or so to work each day. As the national average for gasoline continues to rise, easily hitting $2.50 a gallon or more in the next week or so, one can only wonder where exactly all this will stop or if it’ll stop at all.

John Stith is a staff writer for WebProNews covering technology and business.

Crude Oil Soars to New Record: $61.40
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