OPEC to mantain oil cutbacks even as demand picks up

28 May 2009

Oil and gasoline prices continued to rise on Wednesday with signs of a recovery in the offing and expectations that demand for energy could rebound.

Benchmark crude for July delivery rose to $63.69 up $1.24 a barrel on the New York Mercantile Exchange.

According to auto club AAA, Wright Express and Oil Price Information Service Gasoline prices, which are up 19 per cent in the past month, increased 0.9 cents overnight to $2.434 a gallon. Prices have moved up 10 cents from a week ago and 38.4 cents a gallon higher than a month ago.

About 74 per cent of the forecasters, according to a survey, carried out by the National Association for Business Economics expect the recession to end in the third quarter. Another 19 per cent predict the turning point to come in the final three months of this year, and the remaining 7 per cent expect the recession to end in the first quarter of 2010.

Oil prices that were below $35 a barrel in March have steadily climbed to their present levels on investor expectations of the worst of global economic slowdown may be over.

However, some analysts point out that the rise and rise of oil and gas prices on anticipation of strong demand in the coming months may be coming to an end and gasoline prices could hit $2 a gallon by the end of summer.