Oil hits a 17-month high

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Oil prices posted a 17-month high, nearing $84 a barrel Wednesday after President Obama announced his plans to open new areas to offshore drilling.

What prices are doing: Crude oil prices for May delivery rose $1.39 to $83.76 a barrel. Oil settlement is its highest since Oct. 9, 2008 when it settled at $86.59.

oil2010.mkw.gif
Click the chart for current commodities prices.

What's moving the market: In a speech Wednesday morning, President Obama announced he will open new areas for drilling along the Atlantic coastline, the Gulf of Mexico and the north coast of Alaska.

The plan reverses 20 years of regulations that banned drilling in most offshore areas outside the Gulf of Mexico.

Before Obama's speech, the U.S. Department of Energy reported weekly crude inventories rose by 2.9 million barrels and gasoline supplies increased by 300,000 barrels. Analysts polled by Platts were expecting crude supplies to rise by about 2.65 million barrels and gasoline inventories to drop by 2 million barrels.

The higher-than-expected supply numbers temporarily drove down oil prices in mid-day trading.

What analysts are saying: Oil gains earlier this week were primarily due to increased demand from India, China and the Middle East, as well as a seasonal boost in U.S. demand, as motorists start driving more, said Chris Lafakis, an economist with Moody's Economy.com.

Although the Department of Energy's lower-than-expected demand numbers put a damper on bullish oil prices earlier this morning, once the news of Obama's speech made headlines, oil prices went right back up, said Dan Flynn, an energy trader with PFG Best Research.

Looking ahead: Since the offshore drilling plans Obama announced Wednesday will not inject more oil into the supply chain immediately, don't expect for the news to be a major market mover after the initial euphoria wears off, Flynn said.

In the meantime, investors will be looking ahead to the government's latest unemployment numbers on Friday. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.36%4.24%
15 yr fixed3.39%3.26%
5/1 ARM3.36%3.27%
30 yr refi4.34%4.22%
15 yr refi3.38%3.24%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 9:39pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17

Sections

Spencer has been a supporting member of the "Good Morning America" cast for the past three years. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.