Accidental Explosion; Oil Surpasses $100 per Barrel Mark
February 20, 2008
(Long Island, N.Y.) Oil prices in the New York Mercantile Exchange closed above the $100 a barrel mark for the first time in history. This surpassed the previous high set last month at $99.54 where concerns of inflation and recession in our economy began to heat up. Yesterday Oil prices closed at $100.01 per barrel.
At Gas pumps nationwide, overnight prices also rose by more than 1.8 cents to top at $3.032 per gallon according to AAA and the oil price information service. Experts and economic analyst attributes the increase to numerable factors such as the accidental explosion of Alon USA oil which is a major US oil refinery plant located in Texas and produces over 67,000 barrels of oil a day, the decline of the US dollar and the renewed threats of violence in Nigeria which is Africa’s biggest oil producing region.
Michael Lynch who is the president of Strategic Energy & Economic Research Inc. in Amherst, Mass. acknowledged the gravity of damage the Texas fire might cause in saying, “The refinery fire in Texas is making people a little concerned, you lose over 60,000 barrels a day of US concocted oil and the demand for international import increases.”
Another factor in the continuing increase of oil prices in the World Market is the unrelenting animosity between the US government and Venezuelan President Hugo Chavez over Texas-based company Exxon Inc. Charges against Venezuela’s nationalization oil project resulted in over $12 Billion in Venezuelan oil assets frozen by several courts in Britain and in the US.
“As the economy weakens, it’s going to be met with a $3.50 and $3.60 a gallon price of gasoline at pumps nationwide,” said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. “And that really spells trouble for the consumer.” He also added, “I really think … crude oil’s going to soar through $100, and the explosion at Texas will have a big impact in the long run as they take time to rebuild the facility.”
Factoring in the Inflation rate, the 1980’s economic struggles might still hold the highest price for oil price per barrel as it was at the time $38 per barrel, which the climactic rate back then would translate to $98-$103 today depending on the conversion rate economists applies.
Posted by News LI Editor · Filed Under Business
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