Done for the Examiner.com Sunday June 7
Crude Oil broke through the $70 a barrel level for a while on Friday, before falling back to $68.44, down 37 cents for the day. Prices are steadily moving higher, and as the economic recovery seems to be taking shape, the market is betting on energy going higher as activity picks up.
Natural gas Futures are up; Heating Oil and Gasoline are heading higher, consumers see first hand when they fill up at the gas pump that the overall outlook for energy prices is bullish. Multiple studies are suggesting we will see $85 a barrel oil this year.
A strong dollar move Friday contributed to Crude prices falling back, but on the whole, it looks as though Crude has plenty of room to move higher. The big question is; what does this do to the potential for recovery, not just here in the US, but worldwide? Most of the “Big Engines” in the worldwide economy are net oil importers, so it’s bound to create a drag on growth.
US consumers were just getting used to lower prices for gasoline, heating oil and natural gas, will the price shock send them back to hiding from all but the most necessary spending? The US economy needs consumers to feel good moving forward to get spending rolling again, while sentiment is up right now, it won’t take many weeks of $3.00/Gal gasoline to end that feeling.
As the summer driving season rolls in, tourism interests have to be feeling a bit nervous. What will increased costs do to traditional “Summer Vacation” destinations like Orlando and Seaside resorts?
Well, Oil seems like it’s going to go higher. Had the worldwide economy not been in a serious recession, it’s wise to think it never would have gone down below where it is right now. As growth picks up, energy costs are bound to rise.
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