Follow the bouncing oil prices
Last week, oil was $90 a barrel. Yesterday, it was $120 a barrel. This morning, it was back down to $107 a barrel. Host Scott Jagow talks to Stephen Beard in London to find out what's going on.
Oil traders work on the floor of the New York Mercantile Exchange in New York City. (Spencer Platt / Getty Images)
TEXT OF STORY
Scott Jagow: The price of oil is back down again this morning at $107 a barrel. Yesterday, it skyrocketed -- it was up around $120 for a while. Our European Correspondent Stephen Beard joins us. Stephen, what in the world's going on with oil?
Stephen Beard: One key factor yesterday was that Monday was the deadline for buying oil for October deliveries. So there was a bit of a last-minute rush, plus the uncertainty about the bailout of the banking system, that, it is suggested, drove speculators into oil as a safe haven. Well, but it's not looking so much of a safe haven today.
Jagow: Yeah, but we're quite a bit above where we were last week, which was around $90 a barrel. So, what is the underlying supply and demand situation right now?
Beard: It looks to be a little bit tighter than many market operators were expecting. The story which brought oil down from $147 a barrel was slowing economies in the U.S. and Europe particularly. But, of course, we had earlier this month, OPEC's decision to cut production by a half million barrels a day, and, of course, output shutdowns and damage to infrastructure caused by Hurricane Ike and Gustav and that has reduced supply and put upward pressure on the price of oil.
Jagow: All right. Stephen Beard in London, thank you.
Beard: OK, Scott.
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