This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

15 Ways Oil Prices Will Crimp Your Budget

BOSTON ( TheStreet) -- Political instability in Libya, coming on the heels of government revolt in other oil-producing nations, is driving up the cost of crude oil, and the impact of rising petroleum prices go beyond what you pay at the pump. Everything from groceries, clothing and electronics will potentially cost more.

Saudi Arabia has pledged to make up any shortfall, which helped drive up the stock market early this week after a selloff last week.

The worst-case scenario, however, is that Saudi Arabia also suffers political unrest, causing supplies to drop and oil prices to rise to as much as $150 to $200 a barrel, bringing gas prices to the $5-a-gallon mark.

Even if that pessimistic outlook doesn't come to pass, any degree of oil inflation has measurable effects on a U.S. economy so entwined with the fuel source. According to the International Monetary Fund, a $10-a-barrel increase in the price of oil reduces U.S. GDP growth by 0.5%.

About half of every barrel of oil is used to produce gasoline. The rest finds a use in a wide array of consumer products -- those made of plastic, for instance. The plastics industry, dependent on oil for its manufacturing, is the third-largest manufacturing industry in the United States, employs more than 1.1 million workers and creates $379 billion in annual shipments.

"If the trend of increasing oil prices were to continue, it would have an adverse effect on consumer spending on various industries," says Justin Molavi, an energy analyst for IBISWorld Market Research. "In general, discretionary purchases will be the first consumer costs to go. As a result, industries like travel, accommodation and retail will feel the pain. As consumers spend more on fuel, they are likely to pull back on expenses they know are not necessary. The economic recovery could be compromised if consumers pull back spending sharply. The focus for businesses over the next few months will be whether to pass along costs or reduce the bottom line."

The following are just some of the expenses we'll see rise if along with fuel prices:
1 of 16

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
BBY $32.08 0.00%
FDX $165.11 0.00%
KO $44.80 0.00%
MSFT $49.87 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs