Good morning, bloggers.
It appears gas prices are on the way back up from the extremely modest dip we experienced over the summer. Today’s average price for a gallon of unleaded is $3.87, according to auto club AAA.
That’s a whopping 12 cents higher than a month ago. A year ago, the price was just kissing the $3 mark.
Why the rise? These excerpts from the wire story below point to horrible house sales and a struggling jobs market, proving it’s all interconnected. Rachel Pritchett
NEW YORK (AP) — Oil hovered around $80 per barrel Monday after
new home sales dropped to a six-month low, adding to worries about
energy demand in the slowing economy.
The Commerce Department said that sales of new homes fell in August
and are on pace for the worst year since the government began
keeping records a half century ago. High unemployment and the
possibility of another recession are keeping home buyers on the
sidelines.
The discouraging government report came as European leaders
continued to debate the best way to resolve the months-old debt
crisis that could drag down the regional economy. Investors are
concerned that Europe’s problems could lead to another recession,
which would cut demand for oil and gasoline. Demand for gasoline in
the U.S. is already below year-ago levels.
Benchmark oil rose 10 cents to $79.95 per barrel in midday trading
in New York. Crude has traded between about $79 per barrel and $90
per barrel this month.
It is “just a wild, wild ride now and people are just very nervous
at this point,” oil trader Stephen Schork said. “I think it’s a
real concern that we just very well might be in another
recession.”
Meanwhile Italian energy giant Eni said that Libya has resumed
partial oil production for the first time since its civil war
erupted in February. About 31,900 barrels of oil per day are being
produced. Previously Libya exported about 1.5 million barrels of
oil per day, which was less than 2 percent of the world’s demand.
Some experts say it could take a year or more to get Libyan
production back to that level.
More Libyan exports could lead to lower prices for Brent crude as
more and more oil is put on the global market, PFGBest analyst Phil
Flynn said. That could eventually mean a drop in the price of gas,
much of which is refined from Brent.
In London, Brent crude rose 16 cents to $104.13 per barrel on
Monday.
In other energy trading, heating oil rose 1 cent to $2.8119 per
gallon, gasoline futures rose a penny to $2.5319 per gallon and
natural gas rose 8 cents to $3.785 per 1,000 cubic feet.
