It’s the news that every energy investor loves and everyone who drives something other than an electric car hates: oil prices are back up around $100 a barrel.
At $99 a barrel as of this afternoon, oil is more expensive than it’s been since mid-May. Not surprisingly, average gas prices have climbed to $3.86 per gallon – highest since mid-April.
Here in Vermont, gas prices have edged back above $4 a gallon. The station I pass every day on my way into work has vaulted from around $3.50/gallon earlier this summer to $3.99 for a gallon of regular as of this morning.
In parts of California, Maine and Washington, a gallon of unleaded will run you about $4.20. That’s not a welcome sight for anyone who has a long commute into work.
Like or not, however, the return of high oil prices – and, by extension, gas prices – is a good sign for the economy. When times are good and people are spending, gas prices are high. When times are bad, people tighten their belts, demand drops, and gas prices fall.
After yesterday’s Fed announcement – QE3, bond buybacks, whatever you want to call it – the U.S. economy should stabilize at least for a little while, and oil will likely continue to rise.
So, unfortunately, $4 gas prices may be here to stay – at least until the Fed runs out of out stimulus bullets.