Crude oil for February delivery climbed above $50 per barrel in trading on Tuesday and settled at $48.85 per barrel. This marked an increase of 4 cents from the previous day, as OPEC began its fuel production cuts that were announced on December 17. Fuel prices also saw a spike due to tensions in Gaza and Russia.

Brent crude oil for February delivery climbed 2.7% or added $1.35 to close at $50.97 a barrel on London’s ICE exchange. It also reached the highest level since December 1 when it touched $52.04 earlier in the day.

Beginning this month, Kuwait and Qatar plan to cut down on Asian oil shipments, according to officials in the Middle East. OPEC’s production cut will eliminate 4.2 million barrels per day from September production levels.

Oil prices have been on an unpredictable cycle over the past several months, with July highs of almost $150.00 per barrel, and December lows of just $33.87 per barrel.

With auto sales having dropped 36% in December alone, many are wondering if there is more bad news ahead for transportation and utilities. In a press conference on Monday, President-elect Barracks Obama referred to the U.S. economy as "bad and getting worse."

In other trading on the New York Mercantile Exchange, gasoline futures closed up 0.96 cents at $1.19 a gallon. Natural gas for February delivery settled down by 9.2 cents to close at $5.98 per 1,000 cubic feet, while heating oil gained 5.27 cents to $1.62 a gallon.

At the pump, fuel is up by one cent from yesterday at $1.68 per gallon. Alaska residents can expect to pay the highest price at $2.50 per gallon, and residents of Wyoming are benefiting from the cheapest gas at $1.42.

On Wednesday at 10:30 AM in Washington, the Energy Department will release its weekly crude oil and fuel inventory report.