In this article there are a few analysts talking about why oil is increasing in price so fast. They explain how the weakening dollar is making oil more affordable for emerging markets to purchase the commodity. This is causing a worldwide spike in demand that is continuing to drive oil prices up. Many analysts are saying it will shoot past $100 very soon.
I think the price of oil will cause Americans to shift over to very fuel efficient cars like hybrids and small compacts. This has already been happening over the last couple years with the increase in hybrids on the road, and SUV sales dropping. This trend will increase if the price of oil continues to rise.
5 comments:
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I'm definitely not looking forward to the price of oil going over $100 a barrel. I think it is interesting that the weak dollar combined with high industrial growth in other countries is increasing the demand for oil drastically. With China being so close to taking over the title of highest energy consumption, we need to start working on less expensive, alternative forms of energy.
It is always fascinating for me to see the global impact in modern society. An event in one country is no longer an isolated incident but has ripple effects in many parts of the world.
The move to alternate fuels, however, is a tough one because of the current paradigm around what a 'car' should be. There have been teams of engineering students that have design and developed vehicles that use no fuels at all (hydraulics) yet the plans and the patents get bought up and buried because of fear from the car companies and refusal to shift the transportation paradigm of the general populous.
My only question about this topic is, what price is oil going to have to reach in order for the United States government to realize that we need to either start drilling for oil in our own country or come up with an alternative fuel option?
-1 on Logan for spelling/grammatical errors.
I really think there's only one issue here: the strength and vitality of the international economy. Demand is driving oil prices.
I don't think oil prices will lead to a recession. But, when there is a global recession, I think we'll see prices drop by quite a bit.
Logan: it sounds like you've gotten sucked into one of those fantasies about the availability of reasonable alternatives to gas.
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