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Obama economist says oil spike won’t derail recovery

- The Washington Times - Thursday, February 24, 2011

President Obama's top economic adviser said Thursday the White House is monitoring the spike in oil prices as a result of uprisings in Libya, but said that recent fluctuations aren't likely to derail the U.S. economic recovery.

Austan Goolsbee, chairman of the White House Council of Economic Advisers, said the current picture is much different from oil crisis of 1979 because the nation is "substantially more energy-efficient" when it comes to consumption as a factor in GDP growth.

"The sensitivity of the economy to oil prices is not as great as it was in the past," Mr. Goolsbee told reporters at a breakfast sponsored by the Christian Science Monitor. "The impact of oil prices comes from long-run, sustained increases to prices, not from short-run variations."

The cost of a barrel of oil is hovering just under $100 on the New York Mercantile Exchange after eclipsing $103 overnight, as the violence gripping Libya has undermined production in the North African country. Prices are even higher in London, where crude oil was selling for $113 on the ICE Futures exchange.

Still, while Mr. Goolsbee noted that "nobody likes to pay higher fuel costs," he did not appear overly concerned by the recent price jumps.

"Anything like what we're seeing so far — neither we nor the private sector has forecasted that would derail our recovery," he said.

Even as oil prices climb across the globe, the United States reportedly has added to its oil and gasoline supplies. The country increased its supply of oil by 1.4 million barrels last week and added just under 1 million barrels of gasoline, according to the Associated Press, which cited the energy information service Platts.

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