Oil Issues
OPEC, the world's largest supplier of oil, may have lost control of oil prices. Usually, OPEC cuts back on production during this time of the year because demand slows as the winter seasons dies down and people have not started to travel for summer vacations. Many people around the globe may be wandering why are gas prices increasing. The obvious answer is because of the shortage in oil. OPEC ministers are trying to solve this problem by pumping more barrels of oil a day. The oil producers are worried that the consumption of oil is more than the world can produce. The increase in global oil demand has caused OPEC to use its surplus. By the year 2006, there will be no more of the excess oil capacity. Because there is no more extra oil, producers are pumping more oil to meet the demand.
Saudi Arabia may be the only country that may have oil surplus left. To increase their output, Saudi Arabia has sold a lower grade of crude oil to its consumers. President Bush comments on the problem stating that demand is more than supply and that the supplies are getting scarce. There seems to be rapid growth of global consumption especially in China and India. Despite the shortage, the U.S. economy does not show any signs of slowing down and inflation is still relatively low. If the rise in oil prices continues to grow, then eventually the economy will not grow. High energy costs will slow down world growth. Saudi Arabia agrees to proceed in increasing production right away while the ministers in Iran, Kuwait, and Nigeria wants to wait to see if the demand for oil will decrease in the second quarter. If the demand for oil continues to rise then the world will suffer economically, for example, inflation will dramatically increase. Inflation will cause high prices in gas, which will cause people to do more walking rather than driving. In what ways will oil prices affect you?
Saudi Arabia may be the only country that may have oil surplus left. To increase their output, Saudi Arabia has sold a lower grade of crude oil to its consumers. President Bush comments on the problem stating that demand is more than supply and that the supplies are getting scarce. There seems to be rapid growth of global consumption especially in China and India. Despite the shortage, the U.S. economy does not show any signs of slowing down and inflation is still relatively low. If the rise in oil prices continues to grow, then eventually the economy will not grow. High energy costs will slow down world growth. Saudi Arabia agrees to proceed in increasing production right away while the ministers in Iran, Kuwait, and Nigeria wants to wait to see if the demand for oil will decrease in the second quarter. If the demand for oil continues to rise then the world will suffer economically, for example, inflation will dramatically increase. Inflation will cause high prices in gas, which will cause people to do more walking rather than driving. In what ways will oil prices affect you?
3 Comments:
At 7:06 PM, songbird said…
hmmmmm....interesting. Opec looses control, gas prices shoot through the ceiling, hmmmmmm....
electric cars looking more attractive.
At 11:36 AM, Winston said…
Dwindling oil supplies and their impact on prices greatly concern me. I find it scary that our country, along with others, greatly rely on something that may not be here in the future. I also wonder how much consumers are willing to pay for gasoline before they make changes in their lifestyles. However, I do feel that Senator Ron Wyden’s comment about no one knowing the true capacity of oil production, to be quite valid. Are oil producers being truthful about not being able to keep up with demand, or are they simply taking advantage of the situation?
At 2:28 AM, starlet said…
I think that increasing gas prices will have a big impact on myself and others. Americans will soon have to find other means of transportation because of this oil shortage. I think that if the government decides to increase gas prices, then they should also increase minimum wage so that consumers will be able to function and live in today's society. Another option would be to produce more cars like the Honda Hybrid that runs off gas and electricity and gets more miles to the gallon.
Post a Comment
<< Home