10 March 2011
A gas station in San Diego, California, on Wednesday
This is the VOA Special English Economics Report.
Unrest in North Africa and the Middle East has pushed oil prices back into the news. Prices have been rising at their fastest level since two thousand eight.
Libya is not among the ten largest oil exporters. But the rebellion against Libyan leader Moammar Gadhafi has reduced production, affecting the global market.
This month, oil prices rose above one hundred dollars a barrel. Prices went above one hundred forty-five dollars a barrel in two thousand eight.
The price of oil affects prices and demand for energy, plastics, farm chemicals and many other products made with petroleum.
During the last week of February, Americans paid the second biggest weekly increase in gasoline prices in twenty years. This young woman has to drive a long way to school, so high gas prices mean less money for other things.
WOMAN: "I am a college student and I have to drive forty-five minutes to college, so it sucks."
The United States has a Strategic Petroleum Reserve that contains more than seven hundred million barrels of oil. President Obama could use some of this emergency supply to help ease fuel prices. But intervening in the market could hurt oil production in the United States.
Oil prices have been rising at a bad time, just as many economies have been recovering from the global recession. Also, several countries in the euro area are still struggling with debt crises.
European Central Bank President Jean-Claude Trichet said last week that "strong vigilance" is needed to contain inflation. That could mean raising interest rates which could hurt European countries heavily in debt.
In the United States, higher fuel prices come just as General Motors and Chrysler show signs of recovery after their reorganizations.
American car sales last month were twenty-seven percent higher than last February. GM led all carmakers with a forty-seven percent increase.
High fuel prices reduce demand for big cars and trucks. But economist George Magliano says this time, high prices may be good for carmakers.
GEORGE MAGLIANO: "With gasoline prices higher, certain people might want to get a much more fuel-efficient vehicle and I don’t mean even a hybrid or an electric vehicle which they could do, but the gasoline vehicles get twenty-five, thirty percent better mileage today than they did three or four years ago."
And that's the VOA Special English Economics Report, written by Mario Ritter. Share your stories about what high fuel prices mean to you at voaspecialenglish.com or on Facebook at VOA Learning English. I'm Steve Ember.
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Contributing: Greg Flakus