Chronicles Of Depression 2.0: #105

Oil crosses $129 for first time, heads for $130

NEW YORK (AP) -- Oil prices spiked to a new trading high Tuesday, sweeping toward $130 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory. Gasoline, meanwhile, reached an average of $3.80 at the pump for the first time.

The June contract for light, sweet crude traded as high as $129.60 on the New York Mercantile Exchange before settling back to $129.43, up $2.38. The imminent expiration of that contract created additional volatility in the market, and raised the very real possibility that crude could hit $130 before the end of the day, when the contract was ending.

Oil's trek toward $130 coincided with the Labor Department's report of an unexpectedly sharp rise in wholesale inflation last month. The combination raised fears that inflation will slice into Americans' discretionary spending, and that sent stocks falling sharply on Wall Street.

Retail fuel prices also shattered records. The national average price for a gallon of regular gasoline touched $3.80, according to AAA and the Oil Price Information Service, while diesel jumped nearly 2 cents to a record $4.54 a gallon. Gas prices are up about 19 percent from this time last year.

Emphasis added by me.

"[T]he Labor Department's report of an unexpectedly sharp rise in wholesale inflation last month."

What planet do these people inhabit? Unexpected?! Unexpected?!!!?

I've had two pizzerias nearby go out of business because of the rise in ingredient prices! Here on Satan Staten Island, refuge of the $1.50 pizza slice, it's now $1.75 at one place and others are already at $2.00! It's probably $3.00 or even $3.50 in Manhattan now.

When you have a government that is creating policy based on $3.80/gallon gas and $4.54/gallon diesel, do you think they're considering the $4.25/gallon and $4.79/gallon prices here? Or the higher prices where you live?