Federal Reserve Challenge Personal Income increased by $47.4 billion or .4\% Disposable Income increased by $40.6 billion or .4\% Personal Consumption Expenditures increased by $52.8 billion or .4\%
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Crude oil futures spiked to $96 a barrel on Friday because of sanctions placed on Iran by the UN.
Light crude oil also increase by $95.93, and hitting a high of $96.05.
On Thursday, oil prices slightly declined due to dismal reports on consumer spending and industrial activity.
The AAA,, Automobile Club, and Oil Price Information Service said gas prices rose by 2.9 cents at the pump; the national average for a gallon is now $2.94.
According to analysts, gas prices are catching up with oil prices. Gas has increased by 39% since August.
December gasoline increased by $9.63, $2.43 a gallon.
December heating oil rose by 6.14 cents, $2.57 a gallon.
Due to investors’ concerns over the tension between Turkey and Iraq, gas prices have sharply risen. In addition to that, Hurricane Noel has disrupted oil shipments, and OPEC hasn’t been able to produce all of its increases due to maintenance on some oil fields.
September marked the first time a barrel of oil spiked above $80.
Some analysts predict oil prices will hit $120 a barrel; however, most analysts believe supply and demand will never allow oil prices to increase at such a rapid level.
The EIA predicts heating oil will also increase by 22% this winter. This will lead consumers to cut back on goods and services, which will consequently have a negative effect on economic growth.
Many analysts believe the cost of crude oil will drop as soon as OPEC increases it’s production and curbs fuel consumption at the gas pump.
OPEC has announced it will increase its production in November by 500,000 million barrels.
Three weeks ago, oil prices declined due to fears that the U.S. economy would enter a recession, and also because of an increase in oil production. However, due to geopolitical issues, such as the tension between Turkey and Iraq, oil prices begun to increase.
“Every penny paid for a gallon of jet fuel costs the U.S. passenger and cargo airline industry $190 [million] to $200 million annually.”