As oil prices rise, countries may turn to reserves from Marketplace.

I'm Subrey-Bennishore, in for David Brancaccio.

Oil prices came close to hitting $120 a barrel yesterday.

This morning, they've come back down a little, but they are still just above $100 a barrel.

Gas prices have also wasted no time in rising. The average price of a gallon of regular gasoline is now $3.25, a gallon, according to AAA,

up 27 cents in a week. Julia Coronado is here to talk about it. She's founder and president of

macro policy perspectives and a professor at the University of Texas. Austin. Hi, Julia. Good morning. So oil prices went a little nuts.

In a truth social post yesterday, President Trump said that $100 a barrel of oil, at least short term,

is a very small price to pay. Is that a small price to pay? For the average consumer, it's going to mean substantially higher gasoline prices.

And so that's something most people have to buy every week.

And that is going to crimp the rest of their budget, the purchasing power for other things.

And so really depends

on how important getting around is to you, but for a lot of people, it's going to be a pretty

big bite. How much might this add to overall inflation and potentially drag down economic growth?

One reason I ask is because some folks are making the argument that, you know, the U.S. economy isn't as oil sensitive as it used to be. Maybe this won't be so bad. What do you think?

For consumers, if there's a substantial rise in gasoline prices, we do tend to see an effect on consumer

spending. And I think certainly the oil prices we're looking at right now reach that

threshold. So we would expect to see some hit to consumer spending just from the budget

bite that higher gas prices bring. Julia Cornato is founder and president of macro policy

perspectives. Thank you as always.

My pleasure.

In response to surging oil and gas prices, Canada, France, Germany, Italy, Japan, the UK, and the U.S.

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