The price of oil has everything to do with everything
Oil prices are sure to affect more than just the casual commuter. The price of oil is so high now that the price of goods are following. Very few items that are sold in stores are local, most must be shipped around the country and around the world before making it to the aisle of your favorite supermarket. Today, the price of oil can affect everything from commodity prices, the cost to fly to a vacation spot, or the price of millions of goods made with oil such as plastics.
Take a look at the products offered in your grocery store. The price of apples and oranges have gone up merely because shipping expenses are now 400% higher than they were just a few years ago. Corn prices are even higher than the average because ethanol now consumes corn meant for food uses. The demand for clean energy coupled with high oil prices has sent the cost of food through the roof.
Many companies such as UPS are very susceptible to rising fuel costs. This past week they released guidance about future earnings with the price of oil so high. The cost of shipping a parcel from the east coast to the west coast has only gone up in price with oil. Now the company must find a way to take on this loss or to pass the added expense to consumers, both are options they don’t want to take. If oil prices keep rising, parcel services, airlines, manufacturers, and other oil users are going to look like terrible investments.
