Investing to Wealth

Oil prices have been moving higher this week, and they have made another strong jump again today, passing through the $45 a barrel mark.

Today's move comes in reaction to news that the United Arab Emirates will be cutting its April production by somewhere between 15% and 17%. The United Arab Emirates is the third largest producing OPEC nation, and has created the impression among traders that other OPEC nations will be lining up to follow its lead.

OPEC has its next meeting in March to discuss their oil production. Since September, the group has already reduced output by 4.2 million barrels, and the cuts have not really been able to push prices higher, so it would not be a surprise to see more cuts on the horizon. Look for prices to continue to inch higher between now and the OPEC meeting as more production cut rumors start to circulate.

While many question OPEC's ability to actually stick to its production quotas, there is some evidence that recent cuts are starting to take effect. The government released data showing that imports over the past two weeks were 10% lower than imports during the same period last month.

Another thing helping push oil higher is gasoline demand. Yesterday, the government announced that gasoline inventories fell by 3.4 million barrels, much more than analysts had been predicting.

Oil has moved up $2.65 on the day to $45.15. Earlier in the day prices moved as high as $45.30.

Let's close by taking a look at a current chart on oil to see how prices have been moving over the past week:

Filed under: International markets, Forecasts, Middle East, Oil, Recession

Oil pushes through $45 originally appeared on BloggingStocks on Thu, 26 Feb 2009 16:35:00 EST. Please see our terms for use of feeds.

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