Worries of insufficient crude supplies are still the main reason behind the surging of oil prices. The markets are ignoring the 300,000 barrels per day pumped by OPEC as they try to meet demand and make up for other countries lower output while people still feel unsafe. Saudi Arabia which is the world's largest crude producer said that it is going to incline its output by 3.3% to produce 9.45 million barrels per day by June.
The current prices of crude are already adding to economies inflationary pressures especially as there is a global slowdown and weak economies like the US currently being a victim to high gasoline prices. The contract gained $0.68 as it closed at $126.72 while recording a high of $127.47 per barrel and a low of $125.10 per barrel.
Today, prices continue their rallying on anticipations that Saudi Arabia will not increase their output to meet refiners demand that are looking for yielding more gasoline and diesel products. Also a support to the massive rise in oil prices would be due to the slight weak dollar while investors turn to the commodities market as a hedge against inflation and a falling greenback. The market today opened at $126.86 while recording a high of $127.16 per barrel and a low of $126.69 per barrel.
Supply and demand factors are the major indicators behind continuous rise in crude oil prices. The shutdown of a New Mexican refinery for repairs is adding more to the US current gasoline prices as they believe they will cut back production by 750,000 gallons per day of gasoline. Prices continue to be pressured by insufficient supply despite President Bush of the US promising a temporarily stop to filling government stockpiles.