Potential Rise in Oil and Gas Prices

We knew the lower prices at the pump might be too good to last. The price of gasoline fluctuates with the forward month crude oil contract, and that contract has been on the rise of late. Norway has lowered it's output of oil and natural gas liquids by almost 300,000 barrels per day, the result of safety concerns (regarding life boat standards) surrounding two of it's offshore platforms.

The biggest news causing the rise in forward month trading is the announcement, after weeks of on-again/off-again talks, of an October 19th emergency meeting of the OPEC cartel, to be held in Qatar. Oil ministers are contemplating reducing OPEC's actual output by approximately one million barrels per day. This move would stabilize the market by reducing the uncertainty of the past few weeks. However, a reduction in supply should move the overall market slightly higher, thus increasing our price at the pump. To what extent, it remains to be seen, as does the actuality of the proposed reduction of output by the cartel. The proposed cuts, the first of their kind since April, 2004, would arrive just in time for winter heating bills for much of the nation, should they materialize.