The price of oil reached a new two-year high Friday, November 5, closing at $86.85 a barrel, up 6.7% for the week. Today, it is up yet again, although only by a slight margin. Analyst predict the price of oil will not slow and will rise above $100 a barrel by next year.
Much of the increase in oil demand stems from China, the world's second largest economy behind the U.S. China has seemed to pull out of the global recession faster than many developed nations and is on track for another year of double digit growth. Much of the reason for the increase in oil demand stems for car sales. Between August and September, car sales rose 19%. China's oil reserves are unable to keep up and will be looking to buy more. Hopefully this demand will fuel an increase in the price of oil. Historically, the stock price of COP has correlated closely with the price of oil.
Source: Wall Street Journal
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