NEW YORK, Oct. 19 (UPI) — The surging price of oil is a potential flaw in the U.S. economic recovery, a market adviser said.
“This bull market has a lot to overcome and one of them is rising oil prices,” Hugh Johnson of Johnson Illington Advisors told USA Today.
Oil prices, which put on a burst of steam last week, have jumped to over $78 per barrel, putting the gain in prices for the year at 76 percent, the newspaper reported Monday.
Oil prices rose after the Organization of Petroleum prices in an October report said demand would rise through the end of the year and continue to rise in 2010.
In a sense, prices rose as confidence in stock markets have increased. A bellwether for inflation, however, rising oil prices could, in turn, erode some of the confidence in stock markets.
Soaring oil prices in the summer of 2008 “triggered part of the recession,” Doug Roberts of ChannelCapitalResearch.com said. More than a year later, “if it continues to rise, it could be a problem,” he said.
Copyright 2009 by United Press International