According to MICHAEL J. MARTINEZ who is the
AP Business Writer:
“Surging oil prices prompted new worries about the economy and sent stocks lower Wednesday as investors locked in profits from the market’s recent rally. The concerns over oil overshadowed a strong report on manufacturing orders.”
Crude futures rose sharply after the government reported a 1.6 million barrel drop in its oil inventories. The news created concerns about supply on oil prices. Especially as the summer driving season begins. After rising as high as $51.60 a barrel during the session, crude futures settled at $50.98 a barrel, up $1.31, on the New York Mercantile Exchange.
The concerns over oil eclipsed a report from the Commerce Department that said orders for durable goods — big-ticket items designed to last at least three years — rose 1.9 percent in April, far more than the 1.5 percent analysts had expected. The report cheered investors worried about a slowdown in consumer demand.
From the mid-1980s to September 2003, the inflation adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. Then, during 2004, the price rose above $40, and then $60. A series of events led the price to exceed $60 by August 11, 2005.
