WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan said policy-makers will keep watch on surging energy prices to make sure they don't spoil the nation's economic good times.
On Wall Street Thursday, stocks were recovering some of Wednesday's losses. By late morning the Dow Jones industrial average had gained 88 points and the Nasdaq index added 172.
While the recent surge in oil prices, which hit a 10-year high of $37.80 in September, has not produced higher overall inflation, Greenspan cautioned that risks remain, especially given the "political difficulties" in the Middle East.
"Even though the intensity of oil consumption is markedly below where it was 30 years ago, it still has the potential to alter the forces governing economic growth in the United States," Greenspan said Thursday in remarks to a monetary policy conference.
When crude-oil prices spiked last month, President Clinton announced that he would tap the government's emergency petroleum reserve to help offset soaring prices.
November crude futures, which had pulled back nearly 10 percent this week following a surge sparked by Mideast violence, gained 49 cents to $33.48 a barrel in trading on the New York Mercantile Exchange Wednesday.
Greenspan said that in the short run, oil prices are heavily influenced by inventory levels. Those levels have dropped significantly since decisions by the Organization of the Petroleum Exporting Countries in 1998 and 1999 to cut production.
Brainerd Dispatch ©2013. All Rights Reserved.