Inflation has always been
Oil prices began rising last year. During the start of this “rising”, one analyst wrote: "With global economic growth obviously slowing, demand for oil is sure to weaken in its wake, suggesting softer prices to come. While the $100 level may yet be achieved, it's not likely to last long. We expect an average of $66 next year.” Well, obviously, his assessment was wrong. From $60-$70 per barrel, it is now above $135 per barrel and it the future doesn’t seem too bright, yet still there are those who still claim that oil prices are sure to decrease in the future.
Oil, as well as all merchandise, base their prices on the law of supply and demand. However, base on analysts’ speculation, the current oil prices are no longer driven by the law of supply and demand. They assume that the price of oil is unreasonably high and therefore fall back down in the future.
However this leads us to ask the questions, are the factors that leads the oil price to unprecedented levels unwarranted and unrealistic? To answer this question, we need to look at the facts.
First factor is the supply. The supply of oil as we know is finite. The major suppliers of oil like
The second factor is the weakening of the US dollar. Oil is traded with US dollars. Therefore, countries will buy more oil now rather than when they could buy less with the same amount of US dollars. Countries with huge dollar reserves like
Lastly, the demand for oil has actually increased. Emerging economic powers like
Just base on these facts, I don’t see oil prices to be decreasing in the future. An increase in oil price has corresponding increase in other places like food, electricity, and fares. Therefore, all of us must change our lifestyle and our consumption habits to help us cope with this situation. Let us just hope that our great scientist will be able to find new source of energy.
Source: Inquirer.net
http://business.inquirer.net/money/columns/view/20080525-138752/Ready-for-200-oil
8 comments:
I think, another reason for the increasing price of oil is that the oil distributors think that even if they sell oil for a very high price, people would have no choice but to adhere with it because transportation is a necessity in our lives.
The reason of increase of the oil price is really because its supply is running low. But now we have alternative fuel which I think will replace the Old fuel. It price may be very high but when the time comes it will have a lower price.
oil is a nonrenewable resoure, which means these resources is very limited that it will take another million of years to form a new one. I think the best way to cope the skyrocketing oil prices is to limit our oil consumption by using alternatives such as biofuels, solar technology, etc.
i do think that we should start using alternatives, cause prices won't be going down soon, maybe the other alternatives would be a lot cheaper than the oil.
agree ako kay xtine. nagiging mautak lng ung mga nagbebenta. kasi alam ng ibang bansa na wala silang magagawa kungdi bilin ung langis na binebenta.
I agree with xtine that the increase in thep rice of the oil in the world market is because of the oil distributors. Since they know oil is a necessity, they increase the price so they can earm more. And even if the price of oil is high, everyone still buys it since we need it in our everyday lives.
this is why we should really start looking and researching alternatives that we could use so that we wont be dependent on the oil of others..
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