Oil prices jump, but for how long?

Jan. 4, 2010 at 3:05 PM
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NEW YORK, Jan. 4 (UPI) -- It's too early to tell if oil prices are poised for a sustained surge or showing a brief spike brought on by winter weather, a petroleum pricing expert said.

"It's a little bit of a sugar rush from all the money that comes into commodities at the beginning of every year," industry analyst Tom Kloza at the Oil Price Information Service said, The New York Times reported Monday.

"By next week we'll know whether this is another typical false start or whether it's relevant and related to supply and demand," Kloza said.

Oil prices surged Monday, adding nearly $2 per barrel on the New York Mercantile Exchange to reach $81.38 per barrel.

The price of oil topped $70 per barrel in early August and has remained between $70 and $80 since.

Gasoline prices have also jumped recently. The national average price, currently at $2.663 per gallon, could be reach $3 per gallon by spring, Kloza said.

As gas prices rise, "consumers don't take that extra trip shopping or to a restaurant, and the U.S. consumer is still responsible for two-thirds of the economy in this country," said Addison Armstrong, senior director of market research at Tradition Energy.

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