Importance of Oil
Light sweet crude oil is very important to both the United States and China. In June light sweet crude oil prices were up to $73 a barrel, and now in July the price has been lowered to $60.69 a barrel. It is forecasted that Light sweet crude oil will be down another dollar to $59.69. The costs of refining sweet crude oil into usable gasoline, and fuel for heating are passed on to the consumer. As the prices of sweet crude oil fluctuate, so do the prices of gasoline at the pumps.
Due to economic imbalances throughout the world, the dollar is worth less. Therefore, the United States has to pay more for the goods and services they buy, which includes petroleum products. Light sweet crude oil is so profitable because it is so easily liquidated into money. Light sweet crude oil trading is the basis for our economy. The future prices of light sweet crude oil will determine future prices of gasoline and other petroleum products.
Comparing May and June of 2009, May was a better month for consumers at the pump, and in general. In May the highest price of light sweet crude oil was a little over $65 a barrel. In June, two days stand out as the highest prices of light sweet crude oil. On June 11, and June 29 light sweet crude oil was approximately $74 a barrel. The price of light crude sweet oil affects everyone, and not only at the pumps. You will notice the price of food in the grocery store is higher some weeks than in other. The price of food reflects the cost of transporting it food from its place of origin to your kitchen table. The increase or decrease in the prices is passed down to the consumer.
The NYMEX report gives a daily graphic entry of the current price of light sweet crude oil. July 13, 2009 the price of light sweet crude oil is $63.32 per barrel. Light sweet crude oil wasn’t always as high as it is now. The price of light sweet crude oil stayed fairly constant at below $10 per barrel from 1920 to 1945. There was a slight raise in price from 1946 to 1976. In 1997 light sweet crude oil prices came back down to $10 a barrel. The price has been steadily rising ever since. The price of light sweet crude oil is projected to be above $95 a barrel by 2010.
Last year, July 2008, light sweet crude oil was much higher than it is now, July 2009. Last July the price of light sweet crude oil was nearly $150 a barrel, and now a year later the price is hovering in the mid $60 range. In the last 6 months, from January to July 2009, the price of light sweet crude oil has fluctuated from approximately $45 per barrel to approximately $67 per barrel. The highest price was in June, which jumped up to more than $70 per barrel, and than fell back down into the mid $60 range. What do these price fluctuations mean to the consumer? Prices are constantly changing at the pump. Therefore, the consumer is keeping track of which gas stations have the lowest prices. You may go to a gas station and have a long wait, because the longest lines are at the stations with the lowest prices.