Oil Prices Quickly Becoming a Problem Again

Rewind back to 2008 when oil was trading higher than $140 and it was the front page story almost every day. Consumers really felt the pinch at the pumps as gas prices went above $4 per gallon. Over the last year or so oil has made its way off the front page and gasoline prices have settled back to a slightly more reasonable level. For a while, the average price at the pump was down in the $2.25 range, but of late it has started to creep higher on a consistent basis. I'm not a fan of giving bad news, but recent price trends in the oil futures market mean that it is extremely likely that $3 per gallon will be topped soon. No doubt about it, consumers should be preparing to budget more money for gasoline purchases over the next few months.

It always seems to work out this way, but the timing really is not good for American economy and the average consumer. Summer driving season isn't far away, and the trends aren't looking good for gasoline prices to ease off any by that time. The overall economy has finally started to edge forward and consumer spending numbers have bested expectations fairly consistently of late. The improving economic numbers could certainly be stalled out a bit by crude oil prices nearing $100 a barrel again and gasoline over $3 per gallon around the country. It is actually a bit of ironic development, since part of the reason the price of oil is going up now is the expectation that demand will rise as the economy improves slowly. Every little bit that the price rises, that is eating away at the buying power of consumers.

What should the wise consumer do about this negative development that is sure to hurt us all sooner or later? The single best advice at this point is to plan out your budget for the next few months and try to make small cuts as soon as possible. Preparation is the key to financial success and far too many individuals and families never get themselves ready in a timely manner. The writing is on the wall, the prices at the pump are moving higher. Be wise and budget a little extra for travel expenses and find ways to cut expenses in other areas to compensate. In the next few months, you'll be glad you were ahead of the curve!