Tuesday, April 19, 2011

The increase in oil prices shook the United States Economy

The increase in oil prices that have reached USD108 per barrel to make the price of regular unleaded gasoline rose as much as 86 cents and now average $ 3 sale, 69 per gallon. These conditions make the U.S. economy a bit shaken up because of raising the budget. An aviation company and the United States also feel squeezed by this condition. The unemployment rate rises, sluggish housing market while retail gasoline purchases less gave a positive endorsement for the U.S. economy.

Economist Mark Zandi of Moody Analitics Assosiated Press quoted as stating spike in oil prices since the end of the year a significant impact on the economy. While the extra expenditure incurred consumers to buy fuel oil, commonly used in other sectors of society for the fashion and entertainment. Consumers will certainly delay the purchase of property, and other secondary sectors. In a survey, people in the United States prefer to park his car and did not go anywhere, even during weekends though.

Economic Outlook Group economist Bernard Baumohl has cut its growth forecast this year to 2.8 percent from 3.5 percent. In 2010, the economy grew 2.9 percent. Zandi estimates that higher oil prices would cut growth by 0.5 percent in the first quarter of this. If the average oil price of USD100 per barrel for this year, Zandi said, growth will decline 0.3 percent lower than last year's price.

"Some of the oil this month showed the position of USD 125 per barrel would reduce economic growth by one percent, if up to USD150 per barrel to push the economy into recession"

But it turns out, rising oil prices do not hurt all the components in the United States. In 2008, Exxon Mobil Corp. obtained a profit of USD45 billion after oil through $ 150 per barrel. Companies such as Halliburton Co., Schlumberger Ltd. and Baker Hughes Inc., also benefited a lot by increasing production volume. In addition, the product of biodiesel and alternative energy companies become more competitive when oil prices high.