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 fixed4.09%4.17%
15 yr fixed3.15%3.19%
5/1 ARM3.18%3.30%
30 yr refi4.10%4.19%
15 yr refi3.18%3.21%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,529.25 -154.33 -0.87%
Nasdaq 4,921.58 -70.36 -1.41%
S&P 500 2,052.05 -16.71 -0.81%
Treasuries 2.20 -0.08 -3.51%
Data as of 11:44am ET
Company Price Change % Change
Bank of America Corp... 16.43 -0.51 -3.01%
Freeport-McMoRan Inc... 16.56 -1.28 -7.17%
Micron Technology In... 17.72 -0.60 -3.28%
Intel Corp 29.27 -0.77 -2.56%
Apple Inc 124.22 -1.78 -1.41%
Data as of 11:29am ET

Sections

Championship women's World Cup team paid only $2 million, while championship men's team got $35 million in 2014. More

Greece has nearly run out of cash and experts say the country could soon be forced to print a new currency. This step-by-step guide explains how the nation could re-introduce the drachma. More

Facebook's Sheryl Sandberg is joining the board at SurveyMonkey, her late husband's online survey and polling company. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

Don't ignore your health savings account, it could be a better place for your retirement savings than your 401(k). More