What Happens To The Economy When The Price Of Crude Oil Hits $100 Per Barrel?
SilverDoctors.com
May 24, 2018
“higher oil prices — and the resulting higher gas prices — raise important challenges that our economy must deal with.” Here’s the run-down…
by Zach Scheidt of Daily Reckoning
As I filled up my family’s Suburban this week, my 9-year-old was sitting in the back seat.
Usually, we make faces at each other while the gas is pumping. But this time, she was paying more attention to the pump. When I got back in the car, she had a question for me:
“Daddy, did we really just spend $75 to fill up mom’s car with gas?”
I could see the wheels turning in her brain. She was calculating how many frozen yogurts, beanie boo toys, and arcade tokens she could buy with $75.
“Do we spend that much money EVERY time we fill up with gas?”
This was quite concerning to her. And I didn’t quite know how to answer her.
“Yes sweetie, it takes a lot of money to drive mom’s car. But don’t worry, we still have enough money to get ice cream on Friday.”
Of course, higher oil prices — and the resulting higher gas prices — raise important challenges that our economy must deal with.
But even with U.S. oil hitting new 3-year highs right now, the problem may not be as bad as you think…
What Happens When Oil Hits $100?
Strong demand for oil is driving prices steadily higher. And if you think it’s bad here in the U.S., imagine living in Europe.
Brent crude (which is the European crude oil benchmark) is trading for more than $80 per barrel. That’s about $8.00 per barrel higher than the price for oil here in the U.S.
The growing global economy is creating plenty of demand for oil. And of course, when demand is high, prices naturally rise.
Last time oil climbed above $100 per barrel, it was tough for businesses and individuals.
Higher oil prices lead to higher energy costs for businesses. So running factories, paying for delivery vehicles, even keeping the lights and air conditioning on was more expensive when oil rose last time around.
You probably remember the sticker shock the first time you had to fill up your car with gasoline that cost $4.00 or more per gallon. That was a burden that cut into family budgets and even made it difficult for some people to make ends meet.
The Rest…HERE
