Oil Prices Rising

Oil Prices surged on Tuesday after panel investigating the Gulf oil spill said the oil industry and the government need to do more to reduce the chances of another large-scale disaster. The price of a barrel settles at $91.11 on the New York Mercantile Exchange. The panel's recommendations included increasing the liability cap for damages when companies drill offshore; increasing budgets and training for the federal agency that regulates offshore drilling and lending more weight to federal scientific opinions in decisions about drilling.
The timing of the panel's decision could not have come at a worst time since the US Government is planning on reducing Oil production in the gulf of Mexico. This action taken by the US government will likely cause shortage of inventory and rise at the pump for consumer. Now that the Panel's decision has arrived, Consumer are certain to be hit in the wallet with higher Gas prices.
In the meantime, Gasoline prices have already risen to $3.01. At the same time, the recent winter storms have caused an increase for heating oil which also drove the price of oil higher.
Oil prices also got support from Japan's promise to buy bonds to help finance Europe's bailout fund. The money from the sale will be used as part of an international bailout of Ireland, even as speculation lingers that Portugal and perhaps even Spain may be forced to seek help with financial problems.
In its short-term energy outlook issued Tuesday, the Energy Department forecast oil prices will average $93 a barrel this year, which would be $14 more than the average price in 2010.
The price at the pump is suspected to reach $3.17 by the summer. Certain parts of the country are seeing higher Gas prices close to $3.20 for regular gasoline. According to the EIA, the price of gas could even hit $4.00 per gallon.
In other Nymex trading in February energy contracts, heating oil rose 5.27 cents to settle at $2.6088 a gallon, and gasoline futures gained 2.41 cents to settle at $2.4784 per gallon. February natural gas futures added 8.2 cents to settle at $4.481 per 1,000 cubic feet.

 
I must say that since the Oil Companies usually have enough oil for up to 2 years. I am wondering why we are seeing sudden increase of oil prices at the pump since their inventory price is not affected by current events. Therefore we must ask ourselves why we keep pay more at the pump based upon even that do not quite affect their inventory. Remember that oil companies have posted records profits in Billions. If oil is so difficult to acquire which push them to raise prices, how are they able to manage such records profits? Is it because of demands or because of taking advantage of buying very low and selling very high based upon some sort of events happening somewhere in the world.
Consumers should be ready to spend more at the pump in 2011. The way things are moving, we may soon forget about $2 to $3 gas prices, since we will be spending more than that in the future.
In any cases, this is an opportunity for investors. As we all know, when it comes to dealing with investment products, time is of the essence, having the right information at the right time can help an investor maximize on his/her investment or minimize his/her lost.