David Fry's  Instablog

Tensions in the Middle East and with Iran specifically have boosted prices for crude oil and associated energy products. Increasing global demand for energy, particularly from emerging market countries including China and India, have also put pressure on prices. In the U.S. energy exploration domestically remains politically controversial with warring factions contributing to a lack of any coherent energy policy. This has been self-destructive since alternative energy sources are not yet commercially viable especially as a substitute for gasoline. All this contributes to higher inflation. Commercial and even retail consumers can hedge their daily energy costs and needs by using direct energy ETPs (Exchange Traded Products).

Another consideration causing prices to rise has been central bank easy monetary policies which began in 2008 causing downward pressure on the U.S. dollar. Since most commodities are priced in dollars this puts upward pressure on prices which can become inflationary for all commodity prices, especially energy.

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