Federal Reserve Chairman Ben Bernanke said the U.S. will avoid a 1970s-style period of "stagflation" but said global price pressures could make it harder to stimulate the economy without risking high inflation. That testimony led to expectations that interest rates are headed lower, and the dollar dropped to an all-time low against the euro.
Depending on which model is used to determine inflation adjustments, crude prices are either near or already have broken previous highs set in early 1980, according to the Associated Press. A $38 barrel of oil then would be worth $97 to $104 or more today.
Energy Secretary Sam Bodman called for OPEC to increase production, but OPEC members have indicated that the cartel most likely will leave output steady.
Part of the problem is that the high prices are not really a result of supply and demand. If prices were responding to supply and demand, they would be falling. Recent forecasts have lowered oil demand growth predictions for this year due to the slowing economy, and domestic oil inventories have been growing. Some analysts believe it's only a matter of time before supply and demand resume their influence on oil prices and push them back downwards.