Oil prices remained relatively stable for the fifth consecutive week and closed Friday at $98.67 a barrel on the New York Mercantile Exchange--83 cents more than the week prior. The cost of a barrel of oil increased at the start of last week on speculation Greece was going to resolve their debt situation. But that was not the case, and oil prices quickly fell as the European debt crisis continues to plague the country. As a result, the value of the euro dropped from a two-week high, boosting the dollar and putting downward pressure on oil prices.
In addition, the International Energy Agency cut its 2012 global oil demand forecast by 300,000 barrels a day from its January forecast. This announcement comes at a time when OPEC is producing 30.9 million barrels of oil a day, the most since October of 2008. Oil demand in the U.S. continues to be lackluster as well.
"As long as Europe battles their debt issues, we're going to see global oil demand diminish along with Europe's economic growth," said Jessica Brady, AAA spokeswoman, The Auto Club Group. "At some point consumers should start to see retail gas prices stabilize, as historical trends have shown. It's very evident the rate of increase at the pump has slowed, but we're still paying more week after week and closed refineries are still taking the blame.
"Overall, gas prices increased about 3 cents from last week and unfortunately, they are likely to increase again this week, albeit minimal."