Walter Pierce

Oil surges overnight

by Walter Pierce

The price for a barrel of crude oil shot up more than $3.35 overnight to $51.49, a jump of almost 7 percent from Wednesday. By mid-morning Thursday, according to Bloomberg, the price had eased off just one cent. Analysts attribute the sharp rise to an equally sharp decline in the dollar, which plummeted after the Federal Reserve announced the purchase of $300 billion in U.S. Treasuries and $750 billion in mortgage-backed securities, expanding its debt to more than $1 trillion.

According to Reuters, the current price establishes an intraday high for 2009. However, there is much speculation that prices will remain volatile, along with skepticism that economic turmoil in developed countries and its effect on demand can sustain a price above $50.