Oil prices have risen 48% to $65 per barrel in the last five weeks. Oil, being an essential commodity in any economy, becomes dearer as its demand grows on account of recovery in the global economy. In addition, the U.S. dollar has depreciated against a basket of currencies in the last 5 weeks. A weak dollar leads to an increase in cost of imports including oil. Oil hit a record high of $147 per barrel last summer. While the current level is nowhere near $147, analysts are worried that the prospects of economic recovery may get hampered if oil prices continue to rise.

With unemployment at a high, consumers are not in a position to absorb raising costs. Gasoline prices go up by 2.4 cents for every one dollar rise in crude. James Hamilton, an economics professor at the University of California, San Diego, says if the gasoline price increases, it could "postpone some of the recovery we'd been hoping for."