The New York Times reports today on the confluence of factors causing oil to reach $114 a barrel while the average U.S. price per gallon hit a record $3.39. Diesel now averages $4.12, and the economy is beginning to feel the impact as prices rise to keep pace with increasing transportation expenses. Small disruptions to supply - pipeline problems in the Midwest and Nigeria and bad weather in the Gulf of Mexico - are having oversized impacts on the world market. President Bush's attempt to jawbone oil producers into increasing supplies has been rebuffed. Speaking of its oil reserves, Saudi Arabia's king said recently, "Let them remain in the ground for our children and grandchildren who need them."
[Source: New York Times]