What is the latest financial news regarding oil price increase (July 2018) and why is it...

What is the latest financial news regarding oil price increase (July 2018) and why is it important ? How will it affect the U.S. economy?

Expert Solution

The latest news regarding oil price is that the prices of WTI crude have fallen to $73.18, down $0.76. The prices of Brent crude is $77.42, up $0.12. Roughly the prices have increased since last week. WTI is $3 higher while Brent is higher by $1.30 than last week. The oil prices are important due to the huge volume of oil consumption. They are important both on a micro and macro level.

On a micro level the consumders of the US Economy are hit with an increase in oil prices due to increase in their utility bills. The cost of production of goods and correspondingly prices of general consumption goods is also affected due to increase in oil prices. This slowly causes inflation in the economy as a whole. An oil price hike can also depress the supply of other goods due to higher cost of production thus causing shortages. This in turn will lead to higher imports and loss of valuable foreign exchange in the economy.

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