Consumer Confidential: Oil prices are up, gold and silver prices are up, airfares are up
--Up we go: Oil prices continue their ascent as unrest spreads in Libya. The stakes are higher now because Libya is an OPEC member and a significant oil producer. Egypt isn't, although millions of barrels a day pass through the Suez Canal. Crude oil prices are 5% higher as violent protests spread in Libya, raising the possibility that oil supplies from the country could be disrupted. According to the Wall Street Journal, the price of Brent crude hit $105 per barrel -- a level not seen since September 2008. That price reaction may exaggerate Libya's importance, but it reflects growing concerns that the crisis may spread to other oil producers. And if that happens, there's no telling how high oil (and gas) prices could go.
--Oil isn't the only commodity being pushed higher by the turmoil abroad. Gold has climbed above $1,400 an ounce to the highest price in almost seven weeks, and silver has reached a 30-year high. Traders spooked by the Mideast unrest are seeking safe harbor in precious metals, which traditionally are seen as a hedge against fluctuations in currencies and other investments. For consumers, this means the cost of jewelry and other accessories will rise in tandem with higher gold and silver prices. But you can still say "I love you" with flowers. Or even a card.
--And one more thing heading higher: Southwest Airlines has raised fares on the bulk of its routes by $10 roundtrip, encouraging competitors to quickly match prices. According to USA Today, United, American, US Airways, Continental, Delta, Frontier, JetBlue and AirTran followed suit and raised their fares as well. Southwest says rising fuel costs forced its move. Fare changes by Southwest are considered particularly significant because it is the largest discount carrier in the country. Airlines have jacked up fares five times since December.
-- David Lazarus
Photo: Oil prices are gushing as unrest spreads in the Middle East. Credit: West Kern Oil Museum