Soaring Oil Prices – Morning Business Memo

Feb 20, 2012 9:26am

Global oil prices are now at a 9-month high, moving up to $105 a barrel. Watch for higher gasoline prices as a result. Gas has soared 18 cents a gallon in the past month.

The oil price spike is largely the result of Iran’s decision to halt exports to Britain and France, ramping up the dispute over its nuclear program. Iran’s oil ministry says it has stopped crude shipments to British and French companies. This appears to be a pre-emptive blow against the European Union for sanctions on Iran’s crucial fuel exports. Oil prices were also sent higher by China’s decision to boost money supply in a bid to spur lending and economic growth.

Consumers could pay a bit more for iPhones, iPads, personal computers and other consumer electronic devices. This is one likely effect of the announcement by Foxconn, the largest producer of electronic gadgets sold around the world. Responding to an outcry over low wages, long shifts and poor working conditions at its factories in China, Foxconn announced a big increase in hourly pay, plus a cut in overtime for its workers. In recent weeks protests have been organized after reports of harsh conditions for workers at Apple’s overseas suppliers.

U.S .financial markets are closed today. More overseas stock averages are higher, continuing a recent trend of gains for stocks. The Dow Jones industrial average is at a nearly four-year high and 50 points away from 13,000.

European governments are ready to agree to a new bailout package for Greece. That’s what France’s finance minister said this morning ahead of today’s meeting in Brussels. Funds for the bailout are expected to be put into a special account making it possible for Greece to repay its creditors, avoiding a default.

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