Mark the date: Wednesday, Jan. 2, 2008. The price of light sweet crude oil has hit $100 per barrel for the first time.
Mid-day trading on the New York Mercantile Exchange showed oil futures priced above $100, eclipsing the Nov. 23, 2007, record of $98.18.
As 2008 slammed the door on 2007, officials with the U.S. Energy Information Administration remained convinced that crude oil will average $80 per barrel during the next 12 months.
The previous 12 months tell their own story. The year 2007 will be remembered as much for high oil prices as it will be for the report on steroids in baseball.
The historic year of 2007 began with light sweet crude futures trading at $58.32 per barrel Jan. 3, EIA officials reported. By Dec. 31, oil futures were trading at $95.97 per barrel.
The increase of 64.5 percent was the largest in a single year since 1999.
Analysts at the EIA stated in a report issued Dec. 27, 2007, that increases have been based on global supply and demand coupled with speculative trading. The report stated that “worldwide refining bottlenecks, ongoing geopolitical risks and concerns about supply availability” by OPEC and non-OPEC producers are reasons for the jump in oil prices.
Speculative oil traders affect the price of oil futures when they react to domestic and global events such as supply disruptions or Middle East tensions.
By September 2007, speculative traders helped push oil prices to more than $80 per barrel on news of domestic refinery outages, attacks on Nigerian oil facilities, and tensions in other oil-producing regions.
It’s been up, up and away ever since.
– By David Tanner, staff writer