Oil Prices, Gas Prices Sky Rocket – Just in time for the weekend

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Market turmoil as IEA warns ‘age of cheap oil is over’

Unrest in the Middle East drives Brent crude above the $117 per barrel mark

By Nikhil Kumar

Thursday, 3 March 2011

Growing fears of an enduring oil crisis prompted huge volatility on investment markets yesterday – with shares in the world’s biggest oil producer, Saudi Arabia, slumping to a 22-month low – as a top energy official warned that the “age of cheap oil is over”.

Concerns about the turmoil in Libya triggered sharp sell-offs in stock markets across the Gulf, with shares in Kuwait and Dubai sliding to six-year lows. Oil prices also remained volatile throughout yesterday, with Brent crude futures for April delivery breaching the $117 (£72) per barrel mark in late afternoon trading.

In London, the FTSE 100 fell sharply in the morning, declining by more than 2 per cent at one point, before recovering to close only slightly lower on the day.

The nerves among investors were evident in the movements in the gold price, which touched a record high above $1,440 per ounce. The yellow metal, the traditional destination for investors seeking to preserve their wealth during times of turmoil, was up 6 per cent in February, recording its biggest monthly rise since August.

Last night’s swings came as the chief economist of the International Energy Agency, Fatih Birol, warned that the world may have to face up to the prospect of high oil prices over the long term. “The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case,” he said.



Gas prices in Chicago climb 17 cents

BY FRANCINE KNOWLES Staff Reporter/fknowles@suntimes.com

Feb 26, 2011 04:45PM

Ouch! Gasoline prices in Chicago spiked 6 cents a gallon from Thursday to Friday and jumped 17 cents this past week.

The average price of unleaded regular gasoline in Chicago was $3.50 a gallon Friday, up from $3.33 a week earlier and up from $3.44 Thursday, according to AAA, the Oil Price Information Service and Wright Express.

Blame it on continuing political unrest in Libya, which has caused the price of oil to spike, even though the country supplies less than 2 percent of the oil consumed globally.

“Everyone’s a nervous wreck,” PFGBest analyst Phil Flynn said. “What we’re seeing is perhaps the greatest threat to global oil supply since the Persian Gulf War.”

The Libyan rebellion has all but shut down exports from the oil-rich nation, and traders say it’s hard to gauge how much world supplies — and prices — will be affected as similar uprisings unfold in North Africa and the Middle East.


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