Oil Prices: From $ 26.00 to over $ 50.00 a Barrel

Energy prices causing the recovery to sputter
Experts say expense is stalling job growth; Wal-Mart says consumers feeling drained

Dallas Morning News 11:21 PM CDT on Monday, September 27, 2004
By ANGELA SHAH / The Dallas Morning News

Airlines bleed as precious resources are diverted to pay for jet fuel. The world's largest retailer has said its No. 1 challenge is high energy prices. And economists say the added stress will mean continued lackluster job growth.
Even if oil doesn't close above the psychologically important price of $50 a barrel today, it's already pumping life out of a middling economic expansion. "Higher energy prices create a lot of uncertainty," said Stephen Brown, director of energy economics at the Federal Reserve Bank of Dallas. "Firms aren't sure what they want to do."

As the price of West Texas Intermediate crude crept up to close at $49.64, Wall Street headed for the exits, sending stocks down. "The single most-watched price in the world is the price of gasoline," said Ray Perryman, economist at the Perryman Group in Waco. The $50 price tag is more than just a psychological marker.

A year ago, oil cost $26 a barrel. That premium translates into real money taken out of corporate budgets and family pocketbooks. In an $11 trillion economy, that's about $902 per U.S. household.
"The Number 1 issue facing the customer today is, in fact, energy prices," said Lee Scott, chief executive of Wal-Mart Stores Inc., at an analysts' conference earlier this month.

"For us, that's particularly important because if you look at Wal-Mart's core customer, that is clearly a customer that is economically challenged," he said. "So when you take disposable income out of their pockets and transfer it to their oil companies, it is just money they do not have to spend."

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