Oil prices at $100 a barrel on third day of New Year 2008

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Jan 03 2008
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Fuel prices touched the frightening level of $100 a barrel before eased Thursday. Light, sweet crude for February delivery fell 38 cents to $99.24 a barrel in Asian electronic trading but not before rose $4.02 to $100 a barrel Wednesday, only to slipped back below $100 to a record $99.62 – up $3.64. The $100 a barrel was done for one contract (1,000 barrels) only on the Nymex floor.

The continuous demand from two new giant, China and India, have keep the oil prices volatile and any crisis or instability related to oil would spark the acceleration of the black gold. As usual the violence in Nigeria resumes with the invasion of a band of armed men at Port Harcourt, the center of Nigeria’s oil industry. Two police stations and lobby of a major hotel were reportedly raided.

Oil Prices at $100 a barrelThe U.S. inventory report shows lower than expected stockpiles and the falling U.S. dollars worsen the situation. However U.S. said it would not release oil from the nation’s strategic reserves to drive prices lower. The OPEC said its contributing members most likely will not be able to meet demand as early as 2024. Rumor that rough weather forced several Mexican oil ports to close add to the anxiety amongst investors.

Although many investors are confident the oil prices will breach the $100 a barrel eventually, they also believed the fuel prices will stay below $100 region for some time before going for the $100 kill. If 2006 was the year the oil prices were targeting $90 level, 2008 could be the year $100 becomes the new defacto level.

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I was actually shocked when I was watching CNBC and saw that price for oil went up to $100.00 … what is even more stunning is how I have not seen gas prices react to that hike around here. I am not sure if its creeping slow but I expect it to shoot up at anytime.

Let’s just hope the violence in Africa and the weather as well calms down so that price can drop. I am expecting to see gas prices up around $3.30 a gallon for 87 Unleaded by the end of the year if this keeps up.

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