Our days are getting shorter; fall is saying its final goodbyes and making way for the winter chill. Special commodities such as oil and heat start to become essential and the last thing commuters need to hear is that oil prices are rising. But according to a recent article in The New York Times, oil prices are expected to increase up to $100 a barrel.
New York’s main contract, light sweet crude for December delivery has increased by 86 cents, leaving the price over $90 a barrel. Prices are expected to rise even higher when options on December crude oil futures contract expires and traders buy it at a predetermined price and rate.
So, how will this affect us? To begin with, the majority of St. John’s University students are commuters. High fuel prices will make traveling more difficult, especially for those who live at great distances. As if the threat of a MTA rate hike was not enough, now students are truly running out of options.
Lately, gas prices have been a constant burden in the lives of those who drive and this recent development signals hard times ahead. This set of circumstances prompts commuters to ask one question: Can we get a break?
This increase in price will be a major burden on consumers’ lives as they have to reevaluate their spending habits and priorities.
“It is commonly believed that for every penny rise in the price of gas, it reduces consumer spending by $1.3 billion,” said Mary Ann Hurley, analyst at DA Davidson & Co., in the article.
Many analysts are expecting oil prices to reach about $100 a barrel and foresee a threat of a sharp downturn in crude oil futures.
“The shock value of oil’s recent run-up already has caused many to limit their consumption,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, in the article. “In all my years watching the price of oil, anytime we’ve come up this far this fast, it’s always caused demand to slow down.”
Winter’s threatening winds only bring more worries when this recent increase can affect our heat intake as well. Cold weather drives up heating bills and reaches farther into our pockets. Utility bills will also have consumers tugging at their pockets. With consumers constantly cutting their spending habits, the economy is threatened to go into a recession.
The news of two shutdowns in the North Sea increased supply worries in Friday’s session.
Luckily, oil companies operating in the region said they began restarting shut-in output totaling at least 330,000 barrels of oil equivalent a day.
Other regions are affected by the burden also, In London, Brent Crude rose 39 cents reaching $93.18 a barrel on the ICE Futures exchange.
On the New York Mercantile Exchange, heating oil futures rose 1.3 cents Friday to settle at $2.6188 a gallon. Natural gas futures rose 18.4 cents to $7.897 per 1,000 cubic feet, and gasoline prices climbed 1.84 cents to settle at $2.4560 a gallon.
Energy investors are afraid that if the U.S or global economy slows down, the intake of oil will decrease.
With oil prices rising, commuters at St. John’s will unfortunately have to deal with another burden on their minds together with the pressures of school work and other academics.
All must wonder if these circumstances are manufactured or real. Is it driven by need or greed?