Fri
Jul 14 2006
02:33 pm

Could oil break $80 a barrel soon?

The commodities market seems to think so. (Wow, what happened to "freedom on the march?" Did the Lebanese lose the memo?)

The price of oil surpassed $78 a barrel Friday and leapt 5 percent in the past week after Israeli attacks against Lebanese militants stoked fears of a wider Middle East conflict and possible oil-supply disruption.

The run-up in oil raised concerns about inflation and the economy at large, sending stock prices tumbling. OPEC tried to reassure the market by stressing its commitment to "order and stability," but at the same time said it "has no influence" over the geopolitical turmoil underlying today's volatility.

Because oil accounts for more than 50 percent of the cost of gasoline, U.S. pump prices, now averaging $2.96 a gallon nationwide, are likely to climb some more, analysts said.

Now, what was it that I was saying about this very topic just a few days ago? I'll admit, I missed it by a fraction; the point remains, instability in the markets due to instability in the Middle Eastern region is hitting home and will soon hit home even harder. Reflect on that when you're pumping gas at $3.50 per gallon in the next month.

Maybe the investor class is finally going to get hip to the idea that a destabilized Middle East isn't good for business, it isn't good for their pocketbooks, and, for any number of reasons, just maybe it isn't good for anyone living on this planet.

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