Supply Scare Sends Oil Toward $120
Oil was flirting with $120 on Tuesday, driven by a familiar theme: overseas supply concerns.
By late afternoon, light sweet crude for May delivery was up 13 cents to $119.50 on the New York Mercantile Exchange after a
Oil's rise wasn't the result of oil alone, as the dollar weakened further and the National Association of Realtors reported a drop in both home sales and prices. (See: "U.S. Home Prices Tumble")
At the pump, the average price of a gallon of regular gas rose 0.8 cents Tuesday to a record $3.511, according to a survey of stations by AAA and the Oil Price Information Service. Although gas prices follow moves made by oil, gas is also being affected by falling supplies that comes with a seasonal switch made by refiners.
Oil's rise had a mixed, but largely positive effect on oil stocks, as the
Oil's rise contributed to a tough day on the market, which, along with lukewarm earnings and the falling dollar, pushed the major indexes down. (See: "Wall Street Slides On Oil") Of course, investors tend to gravitate to alternatives such as oil when they feel stocks are more trouble than they're worth.
The high cost of oil has been drowning the highly oil-dependent airline industry. Airline stocks plunged Tuesday, after United Airlines parent