Although I originally thought that the unemployment rate would be hard to beat as an economic issue this year, the high cost of oil may give it some competition:
The cost of filling up the car is rising in the wake of soaring crude and by this weekend, pump prices may race past the highs for all of 2009.
Tracing the ascension of crude, up 14 percent since mid-December, energy prices across the board are catching up.
It’s part economic and part meteorologic.
Vicious pockets of cold stretched from the Northeast to the South, where farmers in the Florida panhandle tried to save tomato and strawberry crops. Four deaths in Tennessee were blamed on low temperatures.
The frigid blast has squeezed heating oil supplies in some areas during a year when demand had been very weak.
Falling supplies in recent weeks have contributed to prices driven higher by the falling dollar. When the dollar falls, investors holding stronger currency can essentially buy more dollar-based crude and they have, doubling oil prices last year.
Look at what happened just on Monday:
— Crude prices closed at $81.51 a barrel, the highest settlement price on the New York Mercantile Exchange since Oct. 9, 2008.
— Heating oil futures settled at $2.1905, well beyond the highest prices of 2009
— Gasoline futures hit $2.1044, the highest closing since Oct. 3, 2008.
With the cold wave that’s hitting the Northeast where people are still heavily dependent on heating oil, the combination of the cold, the cost of oil, and people out of jobs could be a potent one. This should really make cap-and-trade popular!
And I admit this is total snark, but has anyone noticed the absolute silence in the face of a rise in energy prices? Filled up your gas tank the last two weeks?
If GWB was in office the whailing and moaning about his oil ties would have been deafening. The media would have been all over it.
But with The One?
“Hello darkness my old friend, I’ve come to talk to you agian…..”
It’s my recollection that the media doesn’t hype rising gas prices until $0.50 and $1.00 thresholds have been crossed. If gas pops over $3.00, I’d expect some buzz about it. But a moderate hike during a time people are used to moderate hikes isn’t going to attract buzz–especially with bad winter weather causing people to drive less.