Records Fall As Oil Reaches $107 a Barrel

Despite rising demand in China, last week’s decision by the oil producers’ cartel Opec not to raise supply has helped continue the upward pressure on the price of oil with a new record high of $107 a barrel.

The weakening value of the dollar caused in part by falling U.S. employment rates and a drop in consumer confidence is also pushing up the price of oil.

The International energy agency recently released a statement saying “There is no single explanation for prices touching $100 again. It is however symptomatic of a tight and nervous market. We have seen a broad increase in long-term prices - reflecting concern that geopolitical issues, rising costs and access issues are playing a key role.”

The high oil price further compounds the problems in the U.S. economy by increasing business and household expenses and raising the specter of higher inflation.
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