Making Sense Of A Topsy Turvy Energy Market

Why prices are spiking so often and with so little warning

Remember when gasoline prices spurted last spring, rising 17% at the pump? Most drivers have probably long since forgotten. Gasoline prices fell when an expected jump in demand failed to materialize. But the price of crude oil is another matter: It has continued to soar, to more than $24 a barrel, up 34% from a year ago, the highest level since the 1991 Persian Gulf War. The increase is partly due to rising demand and Middle East turmoil, but it also owes a lot to tight inventories. Traders keep fretting that supplies will run short.

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