Oil Soars as Furor Shakes Markets
By CLIFFORD KRAUSS and CHRISTINE HAUSER
Published: February 22, 2011
HOUSTON — The political turmoil sweeping the Arab world drove oil prices sharply higher and stocks much lower on Tuesday despite efforts by Saudi Arabia to calm turbulent markets.
Fayez Nureldine/Agence France-Presse — Getty Images
Ali al-Naimi, the Saudi oil minister, left, with the deputy oil minister, Prince Abdulaziz bin Salman, said that OPEC would meet any shortage in the supply of oil.
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Shannon Stapleton/Reuters
Americans are paying an average of $3.17 a gallon for regular gasoline, 6 cents more than last week.
The unrest that has spread from Tunisia to Libya pushed oil prices to a two-year high and has spurred an increase in gasoline prices. The specter of rising energy costs and accelerating inflation in turn unsettled investors.
Oil is now at a price not seen since the recession began, and it is more than $20 above goals set in recent months by Saudi officials as strong enough to satisfy the top producers but not so strong they might suffocate the global economic recovery.
Although there are still plentiful supplies of oil and gasoline in the United States and in much of the world, American consumers are now paying an average of $3.17 a gallon for regular gasoline, a steep rise of 6 cents a gallon over the last week, according to the AAA daily fuel gauge report. With consumers paying roughly 50 cents more a gallon than a year ago, analysts are warning that prices could easily top $3.50 by the summer driving season.
“Higher energy prices act like a tax on consumers, reducing the amount of discretionary purchasing power that they have,” said Lawrence R. Creatura, a portfolio manager at Federated Investors. “It represents an additional, potential headwind for retailers.”
Those concerns helped send the Dow Jones industrial average down...Read more...
http://www.nytimes.com/2011/02/23/business/global/23oil.html?partner=rss&emc=rss
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