Oil Prices Easing
Oil retreated after hitting record levels earlier today as conficting reports about Israel’s intentions in Lebanon put the markets on edge, also sending gold down from two-month highs. US stock futures slipped, suggesting a lower market opening with earnings reports from companies including Citigroup and McDonald’s failing to provide a boost.
Brent crude futures hit record highs of $78.18 per barrel early today, but fell back to $76.52 before rallying again to $77.21 as traders reacted to often-conflicting reports from the Middle East.
And here is my obligatory note that while these are indeed nominal highs for the price of oil, in real terms the price is well below $95 (approximately) that we would need to see before the previous high will be broken. And yes, increasing prices, even below the high in real terms, has negative consequences for the economy.