Sharp Rise In Oil Prices Could Hinder Recovery A Colorado gas station and car wash owner is already feeling the impact of sharply rising crude prices. Some analysts say continued increases could slow down the economy as it struggles to recover.
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Sharp Rise In Oil Prices Could Hinder Recovery

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Sharp Rise In Oil Prices Could Hinder Recovery

Sharp Rise In Oil Prices Could Hinder Recovery

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RENEE MONTAGNE, Host:

From Denver, Colorado, NPR's Jeff Brady has more.

JEFF BRADY: At the Magic Rabbit Car Wash, there's also a convenience store, one of those quick oil-change shops and gas pumps out front. Normally, this is a good time of year for owner Kevin Leung, because gas prices usually go down after the summer driving season.

MONTAGNE: A lot of gas stations, they do not change the price down that quickly, and that's how we can pocket the difference.

BRADY: Gary Taylor is a principal with the Brattle Group, and he says oil futures appear to be settling in around $85 to $90 a barrel. But that's not because traders know that's where it'll end up.

MONTAGNE: When they don't know, they kind of expect more of the same. So the fact that the markets right now are kind of seeing $90 oil out there for the foreseeable future, that's just because they don't know where things are going to go.

(SOUNDBITE OF LAUGHTER)

BRADY: Taylor says if the higher prices do stick around, that could hinder a fragile economic recovery.

MONTAGNE: You know, a $10 increase in the price of oil is like a $200 million tax on the economy a day.

BRADY: That's $80 billion a year.

(SOUNDBITE OF VACUUM)

BRADY: Back at the Magic Rabbit Car Wash, Kevin Leung worries if customers spend more money on gas, they'll have less to spend on luxuries like a $10 car wash.

MONTAGNE: They don't have that money anymore, because all their money is going in to fill up the tank. Unfortunately, I don't make that $10.

BRADY: Jeff Brady, NPR News, Denver.

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