[BBC] The price of oil hit a record high above $135 a barrel on Thursday – more than twice what it cost a year ago.
[WSJ] Judging from the futures markets, shock at the gas pump is bound to get worse. Maybe much worse.
Since the beginning of the year, benchmark oil and gasoline futures on the New York Mercantile Exchange both have increased by more than a third, but the average retail price of gasoline in the U.S. has risen by 22%. That bodes ill for consumers.
If oil hits $200 a barrel, which is the upper end of Goldman Sach’s prediction for prices over the next six months to two years, the gasoline picture changes quite dramatically. At $200 a barrel, crude alone would cost $4.76 a gallon. Add on the costs of refining and distributing as well as taxes, and pump prices could rise to a range of $6 to $7 a gallon.