Oil Heads Higher, Markets Open Up ?

MAKE MONEY BLOG$/Oil edged higher in the futures markets Monday morning, with the U.S. benchmark West Texas Intermediate rising 1.5% to $105.93 per barrel, and Brent crude in Europe hitting $117.13, an increase of 1%.

Oil continues to track the violence in the Middle East and Northern Africa, where protests against Libyan ruler Muammar Gadhafi have been met with deadly crack-downs. The effects of oil’s high rise includes an average gasoline price in the U.S. that is now over $3.50 per gallon. Any 10 cent per gallon rise in gasoline prices for a sustained period can affect the American GDP, economists say.

Higher fuel prices and fears over continued heated political protests in the Middle East have prompted the White House to look toward alternative sources for oil. President Obama is “considering” tapping into the rarely used Strategic Petroleum Reserve, the White House chief of staff William Daley said on Meet the Press Sunday. The reserves, stored in Texas and Louisiana, were started during the U.S. oil embargo in the early 1970s, and have been used as a back-up measure to supply oil only a few times since that decade.

The United States Oil Fund ETF and Barclays’ iPath Crude Oil ETN, both up 13% in the last two months, were up slightly Monday morning, along with the broader market. The Dow Jones industrial average opened 26 points above Friday’s close at 12,196, the Nasdaq opened 9 points up at 2,793 and the S&P 500 opened 4 points up at 1,325.

source: http://blogs.forbes.com

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