Oil Woes

A new record of $4.04 per gallon of gasoline hit today.  Global demand of crude oil is pushing prices and futures higher and higher.  Commenting on China’s demand of fuel resulting from May’s earthquake, an article quoted said this: ” ‘A 5.5 percent increase in one of the largest consumers of oil in the world is a lot of barrels of oil,’ said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.”  A report showed that Saudi Arabia had increased input by 500,000 barrels a day this quarter which was more than previously thought.  Ritterbusch is quoted saying a couple hundred thousand barrels just isn’t enough. 

Oil prices seemed to have been figured out of Bernake’s economic equations.  He’s quoted in an article on Bloomberg.com: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so,” Bernanke said in a speech at a Boston Fed conference. “The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations.”

U.S Treasury Secretary Paulson admits that record oil prices are a problem in a Forbes.com article.  He believes the $600 stimulus payments have lessened the blow on our economy.   But what about the long term solution? 

Advertisement