Oil Prices going up

Oil prices have recently risen to its highest so far this year. As Ben Bernanke announced his optimism for the economy, energy prices have risen. This article explains briefly why this happens and applies what we have learned in class. During a recession people try to cut back on spending in case of unemployment. The demand has gone down for gas as people try to save on what they can. America has predicted we are now slowly beginning to get out of the recession as Bernanke and other economists announced. But we are now facing the problem of the value of the dollar. The Fed continues to print money making a decline in international value of the dollar. This is a problem when trading with countries in East Asia for oil. They would rather receive euros than dollars because they are worth more. Another reason for the price of gas to rise is because of inflation, because the dollar has lost its value they must raise prices (which in a sense is not changing gas prices). Overall this article explains the positive outlooks for oil as they compared this year's prices compared to the prices in the summer of 2008. Crude levels for this past week have risen by 600,000 to 375.3 million according to the Energy Department's Energy Information Administration. The demand for gas fell one percent for April and refineries increased capacity by more than three percent. Oil has been traded for 50 dollars a barrel which is much cheaper than in July which was $147. However, in February it was only 35%. Let's hope we will never have to see the higher prices that we saw in the Summer of 2008.