Oil prices bounced back past US$127 a barrel, recording a rise of over five dollars as the dollar fell in response to comments by European Central Bank President suggesting the bank could raise interest rates. When rates rise in Europe, or fall in USA, the dollar tends to weaken against the euro. Many investors buy commodities such as oil as a hedge against inflation when the dollar is falling. Also, a weaker greenback makes oil less expensive to investors dealing in other currencies.
Gas prices rose to a new record near an average US$3.99 a gallon, likely to hit US$4 shortly. Diesel prices have slid to US$4.77. High diesel prices have boosted prices of food and consumer goods transported by truck, ship and rail. High prices have led consumers to cut their gasoline consumption. Several Asian nations are cutting fuel subsidies, effectively raising prices. Automakers are cutting production of gas-guzzling SUVs and trucks, and airlines are cutting capacity.
06-Jun-08 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}