Oil closes out the week strong

Posted May 29th 2009 5:40PM by Michael Fowlkes
Filed under: International Markets, Forecasts, Consumer Experience, Middle East, Market Matters, Oil, Recession, Financial Crisis

There is still much debate taking place as to whether or America is close to coming out of its current recession, but you would not know it by watching oil prices over the past few months. Today was no exception, with prices moving above $66 barrel as we head into the weekend.

It seems like a long time ago that oil prices were hovering down in the low $30's, but it was not all that long ago... just five months to be exact. As oil has been rising, so have gasoline prices. It is easy to view the current gas prices as "cheap", considering where we were this time last year, but you have probably already noticed a nice jump in what you are paying these days.

The national average for a gallon of gasoline is now sitting at $2.447 a barrel. As recently as 9 days ago I wrote a post on oil and gas prices, and that time the national average was sitting at $2.334 a gallon. At least one reader from Michigan wrote in that they were already paying $2.54 a gallon where he lives. Made me think, and the next time I drove by my local gas station the prices were about a dime higher than the average. I am in Raleigh, NC. So, definitely write in and let us know what prices you are seeing in your part of the country.

A big reason why oil has been rising is the increased optimism that the U.S. economy is closing in on the end of the current recession. The basic premise that when the country rebounds, it will demand more oil. It's a perfect argument for prices moving higher, but it is making one big assumption, that being that America is coming out of the slowdown.

So for now, prices are still moving higher. Oil traded up to $66.31 today, picking up $1.28 on the day. How long it will be able to keep up this pace remains to be seen, but as you can see by the following chart, the recent move has been impressive: