Oil prices surged yesterday as a result of a weaker U.S. dollar and this encouraged more investors into oil markets as oil is priced in dollars, as funds flew in the markets supported the great rise we saw in prices that occurred. Investors usually invest in oil as a hedge against inflation and a weak federal currency. The contracted gained $3.08 closing at $71.10 while recording a high of $71.79 per barrel and a low of $67.54 per barrel.
The U.S. stock markets yesterday ended the day in the green territory as a result of speculations in the markets that a global recovery is taking place especially as major nations released upbeat data therefore investors became optimistic as they entered equity markets. Looking at oil shares we see that Exxon Mobil gained 1.47 point or 2.12% to $70.65, Chevron Corp. leaped 1.52 points or 2.20% to $70.48 while ConocoPhillips spiked 1.03 points or 2.29% to $46.00.
Today, oil prices extend their gains while the focus in the oil markets is on the OPEC meeting later on today, OPEC produces nearly 35% of the world's crude oil and expectations show that they will leave production output steady. The markets today opened at $71.33 while recording a high of $71.56 per barrel and a low of $70.89 per barrel.
If today OPEC were to cut oil supplies then this would push oil prices higher as then supplies would be stressed despite the weak demand on oil that has been pressuring prices as a result of the ongoing global recession which is why we see prices in the long term tumble.
The EIA report will be released tomorrow delayed from today as a result of the U.S. Labor Day Holiday which meant the markets were closed on Monday.