Bizzcrunch: Average oil price only up by 1 percent after economy adjusts

Average oil price only up by 1 percent after economy adjusts

As oil prices climb toward the once unthinkable $100 a barrel level, fears that the U.S. economy could tip into recession are also rising.

To spur spending and borrowing, the Federal Reserve on Wednesday cut a key short-term interest rate for the second time in two months. This, even after the economy grew at a respectable 3.9 percent annual rate in the third quarter and fuel demand continues to rise. So what gives?

Anxiety-inducing headlines can cloud reality, analysts said, especially when it comes to a critical commodity such as oil, whose economic impacts are best measured over time. Through October, the average per-barrel cost of oil is only 1.3 percent higher than during the same period in 2006, and motorists have paid just 3 percent more per gallon on average at the pump...

Originated by International Herald Tribune

Labels: Commentary

This entry was posted by David Choi, on Thursday, November 1, 2007. You can leave your response.

Average oil price only up by 1 percent after economy adjusts

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