TEXT OF STORY
Steve Chiotakis: While gas prices are still off of their highs from last Summer, oil prices have been on the rise again. They’re up the past month at the fastest clip in a decade. And that means the subject of oil prices is likely to come up when President Obama visits Saudi Arabia this week. Here’s Marketplace’s Steve Henn.
Steve Henn: Since January, the average price of a gallon of gas has shot up by about a dollar.
James Hamilton: Americans buy about 140 billion gallons of gasoline a year.
Economist James Hamilton’s at UC Santa Barbara:
Hamilton: So each dollar a gallon rise in the retail price takes $140 billion in spending power.
Out of the economy. And the economic impact can be even larger as consumers put off big purchases like new cars.
But Ruchir Kadakia at Cambridge Energy Research Associates says this year, drivers don’t need to worry:
Ruchir Kadakia: They’ve probably seen the peak of what they are going to see at the pump over the summer.
One reason: Saudi Arabia will bring an enormous new oil field online this month. And Kadakia says the Saudis have no interest in another oil shock.
Kadakia: The danger to them is that the price move so high that the world would have weaned itself off of oil.
And they’d prefer for their international customers to remain addicted.
I’m Steve Henn for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.