March 1, 2011, the U.S. stock index closed lower. Dow Jones Industrial Average declared its biggest drop in a week’s time when oil prices went beyond $100 per barrel in electronic trading. According to Ben Bernanke, the Federal Reserve Chairman, the increasing prices for energy could prolong the recovery of the market.
Ben Bernanke also said to the Senate Banking Committee, “Sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability.” According to Bernanke, the rise in commodity prices isn’t significant enough to become a threat to the bigger economy.
Crude Oil Movement
The current unrest in the Middle East as well as North Africa caused many to worry that the oil supply will be interrupted, that is why oil price in the New York Mercantile Exchange just recently bounced back from a whole week low.
The contract for April delivery for crude oil futures became $2.66 and closed to $99.63 per barrel. Prior to when the New York Stock Exchange closed, the oil prices increased to more than $100 in electronic trading.
Jay Suskind, Senior Vice President at Duncan-Williams believes, “I don’t think the economy is strong enough to handle gas at the pump at $4 a gallon, which is where we’re heading. The political unrest and impact on the energy sector is going to keep a lid on this market.”
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