Gloomy figures from the other side of the Atlantic were the main reason for the hike - the US said its crude oil reserves had fallen by 5.4m barrels, thanks to a drop in imports and increasing demand from refineries (perhaps they can’t keep up with filling the gas tanks of all those Hummers). The fact that the dollar remains in the doldrums didn’t help either.
Hardly a week seems to go by now without the oil price hitting another improbable milestone. It doesn’t seem long ago that there was much wailing and gnashing of teeth when the price topped $100 a barrel; five months down the line, that seems like a bargain. Oil is already worth more than twice as much as it was this time last year – and with a $5 jump yesterday alone, one OPEC official even suggested it could be selling at $200/ barrel by the end of this year. That’s good news if you’re a member of OPEC, but pretty grim for the rest of us.
This price escalation hits us all in the pocket because it makes transport so much more expensive. This doesn’t just mean that we’re paying more to fill up the Fiesta or to fly out for our fortnight in Faliraki; it’s also ramping up our shopping bills, because it costs so much more to get food and clothes onto our shelves. That’s why Mervyn King is going to spend the rest of this year at his writing desk explaining to the Chancellor why inflation is so far above 2%.
So it’s no surprise that the Office for National Statistics reported a second consecutive month of falling retail sales this morning. Admittedly the drop was slightly less than expected, at 0.2%, but it sounds as if we can thank Grand Theft Auto IV for that – computer retailers got a big boost from the big-selling controversial videogame, offsetting a 1% fall in food sales. (Although it would probably be wrong to conclude that the general populace would rather pretend to steal cars and beat people up than eat).
But even if the sales prospects of most high street retailers are looking shakier than John Terry’s standing foot, at least someone’s benefiting from the current malaise: apparently falling house price sales are boosting rents for buy-to-let properties. Just goes to show: even the blackest of clouds have a silver lining. As OPEC would doubtless agree...