Oil crosses $100 a barrel. Trading around $97 - $98 now.

[JohnWxy]

http://money.cnn.com/2011/02/23/markets/oil/NEW YORK (CNNMoney) -- U.S. oil prices spiked above $100 a barrel for

the first time in over two years Wednesday, as reports of Libyan oil production shutdowns swirled.

Italian oil giant Eni said Wednesday that it had partially shut down its 150,000-barrel-per-day production in the North African country.

Andrew Lebow, an oil broker at MF Global in New York, said the unrest has already cut Libya's production by 300,000 barrels.

"But 300,000 barrels could be just the beginning," he said. "The situation is very chaotic and it's difficult to get good information, but the market is anticipating that more production will be lost."
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http://www.bloomberg.com/news/2011-02-23/euro-won-gain-on-outlook-for-rates-as-oil-rises-asian-stocks-fluctuate.html

Crude for April delivery climbed as much as 4.8 percent to $100 at 1:07 p.m. in New York and gasoline and heating oil surged. The Standard & Poor’s 500 Index slid 0.8 percent after tumbling 2.1 percent yesterday, the most in six months. Hewlett- Packard Co. led losses in equities after its forecasts trailed analysts’ estimates. Sugar and cotton dropped more than 2.8 percent. The euro gained on prospects for higher interest rates.

Concern that surging fuel prices will derail the global economic recovery grew as governments evacuated thousands of expatriates from Libya and opponents to Muammar Qaddafi took control of eastern port cities in Africa’s third-biggest crude supplier. An extended $10 rise in oil cuts 0.5 percentage point off U.S. growth over two years, according to Deutsche Bank AG.
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Treasury Sec. Geitner was doing the right thing by counseling everyone to stay 'cool':

"U.S. Treasury Secretary Timothy F. Geithner said the economic recovery has put the world on a better footing to withstand the increase in oil prices caused by turmoil in the Middle East.

“The economy is in a much stronger position to handle” rising oil prices, Geithner said today during a Bloomberg Breakfast in Washington. “Central banks have a lot of experience in managing these things.”

[Newest Reality]

1. Well, maybe the economy is in some sort of poisition to

handle things, but that must indicate that the people are something other than the economy. Oh yeah, the economy is about those who have enjoyed a recovery, record profits and now the money and leisure time to revamp and recreate our government to their liking.

The rest of us may not be in a stronger position to handle any rising prices at all. Our position is not strong, in that sense. Our ability to withstand the increases in commodities and energy is fragile. That may determine our position on the political onslaughts of corporate takeover.

[JohnWxy]

2. while Geitner's statement was true, it said nothing about just how much of a price increase our

economy (driven by people with a given amount of money to spend) can take without showing an impact in terms of less job growth. Most economists, market watchers, professional money managers do not think we have all that much ability to take much of a price increase in oil - for very long - without it impacting economy.

I don't feel good about the mid-East situation. If it should cause gas prices to go above $3.50 for very long, I think this would not be good at all for our economy and job creation.

Here is a quote from Jason Grumet a knowledgeable person on environmental issues who is pretty well versed in the impact of oil prices on our economy....

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=271601&mesg_id=272843

http://www.nytimes.com/2011/01/31/business/global/31markets.html

With the United States economy seeming to gain a foothold only recently — government data released Friday showed the economy grew by 3.2 percent in the fourth quarter of 2010 — a sustained increase in oil prices could choke growth, analysts said. It could also undermine the more general optimism that lifted the Standard & Poor’s 500-stock index by 1.5 percent in January, after a 12.8 percent jump in 2010.

“A one-dollar, one-day increase in a barrel of oil takes $12 million out of the U.S. economy,” said Jason S. Grumet, president of the Bipartisan Policy Center, a Washington research group. “If tensions in the Mideast cause oil prices to rise by $5 for even just three months, over $5 billion dollars will leave the U.S. economy. Obviously, this is not a strategy for creating new jobs.”

...now to translate that from a price per barrel to a price per gallon, a $5 increase in the barrel price of oil would be roughly equivalent to a price of $3.27 a gallon.