It was just two weeks ago that the price of crude oil fell below $60 per barrel and provided modest relief for consumers at the pump. But that was two weeks ago.  Friday, the price of oil briefly crossed $68 per barrel, so the big question on many minds is, "What happened?"
     Sentiment on the economy has shifted noticeably away from the bearishness that had gripped traders at the beginning of the month.  Earnings have topped expectations and multinationals have said they are seeing signs of stabilization.  The stock market has been rising as well, gaining 12 percent in the last 2 weeks.  Because expectations now have a bullish tilt, investors are warming to stocks. Forecasts that the global economy will bottom in the near term are raising hopes that demand for crude oil will eventually rise and mop up the excess supply.  Consequently, traders are once again looking favorably at commodities, including crude oil.
     Despite a bullish trend surrounding the increase in the stock market, some analysts feel the upside in crude prices will be short lived. Refineries are still cutting production and inventory levels remain high. Some experts are skeptical that prices will continue to rise, in fact, they think we may see a pull back similar to the one we had in June.
     This week the five-week trend of decreasing gas prices slowed to a crawl, and in some areas even reversed, according to the American Automobile Association.  The average price of self-serve regular gasoline nationally was $2.51 per gallon on Friday, which represents a 3-cent increase over the previous week.   For California and other parts the West Coast, retail self-serve prices remained flat.  Some areas were up 1-2 cents while other areas were down a few cents.  California's average price for regular unleaded gasoline remained the same as the week before, at $2.84 per gallon.
     Diesel fuel prices nationally were flat as well.  California prices fell by 5 cents per gallon, from $2.80 to $2.75 per gallon.  Nationally, diesel cash prices last week remained the same as the previous week, at $2.60 per gallon.

Dave Jackson 
Director of Commercial Fueling
NELLA Oil Company