Current Events Affecting Oil Prices

OPEC "Comfortable" With Current Oil Prices

OPEC has decided to keep the oil production cap where it is at its most recent meeting, stating that their are "comfortable" with the current price of crude oil. They believe that letting prices rise much higher would harm world economic recovery, whereas letting it fall lower would cut into their bottom line.

Source: When OPEC decided on the production quotas By MERLIN FLOWER for OIL-PRICE.NET, 2010/03/25

However, other signs indicate that prices have continued to rise and it is reasonable to believe that, since the supply will not be changing, these other factors will continue to boost the price of oil. Indeed, the news that supply will not increase has, itself, caused prices to rise a few dollars a barrel.

Source: Oil Prices .com

NOAA Predicting Warmer-Than-Normal Weather

Our National Weather Service climate prediction for this Spring and Summer indicates that national weather should average higher than usual. In New England specifically, weather is expected to be normal for Spring but hot during Summer. This means that energy requirements related to air conditioning can be expected to be correspondingly higher than normal.

Source: NOAA Seasonal Outlook

Factors affecting oil prices are complex and partially psychological. Short-term fluctuations can be caused by apparently insignificant events if stockbrokers and speculators think they might affect the future oil market; at the moment, people are holding their breath to see what Obama's stimulus plan will do. Long-term changes (over the course of a season) are generally the result of major shifts in supply and demand, or on the perception thereof. To learn more about the recent credit crisis and its relationship to oil, read The New York Times' detailed account.