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Impact of gas prices on the economy

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The price of crude oil is at its highest in more than two years, driving up the prices of gasoline. Crude oil prices settled at a 29-month high on the New York Mercantile Exchange. The average price for a gallon of regular is $3.51nationally, with prices more than $4.00 in some states. University of Florida Distinguished Professor of Economics, David Denslow, says the surge in prices is not due only to instability in the Middle East, but also because of a higher demand for gasoline in other countries.

“We do have the uncertainty caused by the disruptions in the Middle East so that’s causing some storage of gasoline and some speculation, but I think primarily this is part of a long-run trend where at the moment the demand is simply growing faster than the supply.”

Denslow says as gas prices continue to increase they will force families to cut back on spending and could hinder the economic recovery.

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