The week has barely gotten under way and oil has already reached new record highs. Last Friday we saw a new intraday high of $92.22, but that record was shattered today with prices moving up as high as $93.20 earlier in the session, and are currently trading up $0.97 to $92.83.Last Friday I took a look at a look at several factors that have been pushing prices higher, and these are all still in effect, but today's move comes from a new source of supply concerns out of Mexico. Today's jump to new highs was spurred on by news that a storm in the Gulf of Mexico was forcing Petroleos Mexicanos, or Pemex, to cut back about 600,000 barrels a day worth of oil production.
Pemex announced yesterday that bad weather had already forced the oil company to cut back about 200,000 barrels of production and that another 400,000 barrel cut was on the way. The company produces on average around 3.2 million barrels a day.
On top of the current bad weather that is hitting the area, there are also reports that more bad weather could be reaching the Gulf in the form of Tropical Storm Noel that may further reduce oil production in the region.
Just how much higher oil prices will rise remains to be seen, but for now, all signs are pointing to higher prices in the days ahead.
[Photo: danrandom]
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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