Thursday, January 3, 2008

Oil Prices hit $100 a barrel


On the first NYSE trading day of 2008, oil prices topped $100 a dollar, before settling back to $99.62. In early 2007, oil prices had been just over $50 a barrel. Pump prices are around $3 a barrel in most places, and it may seem surprising that they are not even higher.

As a result of rising prices the Dow fell 221 points, or about 1.7 % yesterday. And Exxon-Mobil (XOM) slipped bout 1.5 despite the higher prices, partly over concerns over violence in the producing areas in Nigeria. There is an AP story to the effect that oil inventories fell last week for the seventh straight period, link here.

The falling dollar may help account for some of the rise. One wonders if this economy can stave off 70s style "stagflation" forever without getting a grip on the trend regarding oil prices and supplies, where many warning is about passing "tipping points." The rising living standards in China particularly put enormous pressure on oil prices.

In the face of global warming, they still stay that the U.S. is the "Persian Gulf" of coal. Just fly over southern West Virginia now.

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