On Tues crude oil prices passed $90 a barrel to the highest level seen since before President Obama was elected. Oil costs, also as gas costs, have been pushed up by a weak U.S. dollar and increasing demand for heating oil. Other factors pushing up gas and oil costs include traders looking for a hedge against the weakening dollar and a deal reached Tues to extend the Bush tax cuts, which investors think will shore up economic recovery. Post resource - Rising oil prices driven by global weather, markets and politics by Money Blog Newz.

twenty six-month high with oil costs

Tuesday, the prices for the West Texas Intermediate (WTI) crude oil costs went higher than they have been since October 2008. The cost was $90 a barrel. The WTI crude oil is also called TX light sweet crude and is traded as a commodity as oil futures on the New York Mercantile Exchange (NYMEX) which determines oil pricing. Crude oil futures rose as U.S. inventories declined, based on the Energy Department. In just six weeks, the oil inventories went down by about 40 million barrels. The inventory is just expected to go down as well. Demand for heating oil in the United States was forecast at 16.3 percent above normal for the week ending Dec. 11, based on the National Weather Service. In Europe, below normal temperatures are driving above normal energy demand.

How the Bush tax cuts affect oil prices

WTI crude oil costs surged after President Obama said he will agree to a two-year extension on all Bush tax cuts in return for extending unemployment benefits and cutting the payroll tax by 2 percent next year. Bush tax cuts would help the economy out a bit, say some investors. That means oil costs and oil corporations will be okay. Stronger United States dollar had been keeping crude oil prices in check, however recent Federal Reserve monetary policy moves have eroded the dollar's value. Costs are going up because of traders trying to hedge against the declining currency. WTI crude oil futures are being bought by these people.

Experiencing massive price lifts in 2011 gas

Speculators have pushed wholesale gas futures up by 55 cents a gallon over the last three months. In the past week, national gas costs went up more than 10 percent. In the United States, the trend will probably continue. This is expected. OPEC's governor, an Iranian, said the rise in oil price doesn't yet compensate for the fall in the dollar and that oil will soon reach $100 a barrel. Several of the energy analysts suggest that next year the gas prices will become high again. They might get near $4 a gallon.

Articles cited

International Business Times

ibtimes.com/articles/89539/20101207/crude-oil-breaks-above-90-as-obama-agrees-to-extend-tax-cuts-wti.htm

Bloomberg

bloomberg.com/news/2010-12-07/oil-trades-near-26-month-high-on-forecast-of-decline-in-u-s-crude-supply.html

Reuters

reuters.com/article/idUSN0732290620101207