Tuesday March 1, 2011

I've Been Thinking:

The price of oil per barrel has been going up and up - a natural outcome of the unrest in the Middle East. But over the weekend something changed - now oil prices are dropping and dropping. The price began creeping below $100 a barrel and is now at $97.
And yet, the price of gasoline continues to increase even as the price of oil goes down.

There is obviously a calculus that takes place determining oil and gas prices, a calculus that includes costs like refining and delivery. But we all know that the bulk of the price of gasoline is the cost of crude oil per barrel.

Bottom line is that the unrest in the Middle East is having a very clear impact on the cost of oil and the cost of oil has a clear and direct impact on the entire world. The trickle down effect touches everyone.

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