The crude reality of oil prices hikes

If money makes the world go round then oil certainly greases the wheels it turns on. Any fluctuation in the price of oil impacts directly on all facets of global economics, not least on the manufacture, sale and supply of oil-based manufacturing products such as plastics.
A dramatic jump in oil prices, such as we've seen in the later quarter of 2010 and the start of Q1 2011, inevitably inflates the price of goods and manufacturing products, leading to pricing and margin issues for retailers and knock-on price hikes for customers.
Figures released by the Office of National Statistics at the start of 2011 shows UK manufacturing input prices rose at an annual rate of 12.5% in December 2010, a three point jump on the previous month.
The main influence affecting price inflation of manufacturing products stems directly from a rise in the price of crude oil.
In January 2011 the price of oil rose by more than a dollar a barrel to $95.8 for US light crude and to $95.83 for London Brent.
Rising fuel costs were further compounded by the harsh weather during the winter months of 2010/11 across Europe and the US.
Any prolonged increase in oil price throws up various dilemmas for buyers and retailers as to how, and from where, they source goods and produce at a price where they can continue to generate profits.
"Because the price of oil is rising it ultimately becomes more expensive for buyers and retailers to source goods," explained Diana Wheeler, manager at Michael Page Retail.
"This results in buyers attempting to find cheaper ways to source goods and forces buyers to source suppliers from different regions; for example from the Far East to Turkey or further afield," said Diana.
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