World oil prices surged to fresh record highs above $142 a barrel Friday as Asian share prices plunged. A sell-off in Asia followed Thursday's steep three-percent decline in U.S. stocks. U.S. shares posted mixed results in Friday's afternoon trading.
Some economists say higher oil prices make it harder for companies to make a profit, prompting investors to move their money out of stocks to other investments, driving down share prices.
The spike in oil prices comes after the president of the Organization of Petroleum Exporting Countries said Thursday that he expected crude prices to go as high as $170 a barrel in the next few months.
Oil is traditionally priced in dollars and prices have about doubled in the past year in part due to the declining value of the dollar.
The strength of the U.S. economy, which influences the value of the dollar, got mixed reports Friday.
The U.S. Commerce Department says millions of tax rebate checks mailed to U.S. consumers boosted consumer spending eight-tenths of a percent in May, the biggest gain in months. Economists watch consumer spending closely because consumer demand drives about two-thirds of the U.S. economy.
A separate report from the University of Michigan may predict problems for consumer spending. U.S. consumers have been hurt by rising gasoline prices and unemployment and a survey shows they now have the gloomiest economic outlook in 28 years.
Some information for this report was provided by AFP.