The oil price rose sharply in 2008. Some analysts forecast that oil prices would continue to rise and some analysts now forecast that oil prices will remain high. At the same time, other analysts forecast that market forces would reduce oil prices. These days, oil price dropped and causes the would economics problem. There is high unemployment rate in the United States and high debt levels in Europe.
The BBC reports that "Oil prices have fallen on concerns that the US could fall back into recession, and continuing anxiety about euro zone debt levels" (P4). The oil prices decreased effect the world economic. The reports said "US light crude had fallen $2.40 a barrel to $84.05, Brent crude was also lower, dropping $1.66 to $110.67 per barrel," and the unemployment rate remained unchanged in August at 9.1%. In Europe the main share indexes were down sharply.
The strengthening of the dollar is the main factor pushing most commodities lower, and oil is always the leader. Another possible cause of oil production decline is mismanagement. The run up in price earlier this year was the concern the Asian demand was growing rapidly, and the world oil supplies could not keep up we all know that oil price are lower than they were in the recent past because supply is greater than demand. The problem is people are trying to get away from using gas. People are trying to use more green energy like wind, solar, and tidal power. Despite this, a lot of people are doing what they can to save energy. Whether they are doing it to save the world or to save money.
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I think that the turbulence in oil price has enormous effects on our living expenses because it is a basic cost for people do activities everyday. It is chain effect that when the oil price is raising, others cost would be raised- transportation costs and product prices are directly increasing than overall living cost is also raising up.
ReplyDeleteIt remind me about Thai oil prices a couple of weeks ago. The Thai government pronounced that oils price would drop to reduce living cost and to help economy of the country. Public transportation had adjusted fare price down. However,after that a few days, the oil prices is slightly increased to the same price before. There are a lot of problems due to oil price.
I think it's better for governments not to interfere in the price of commodities like oil. It should probably be much higher - the real cost should include enough to pay to fix the environmental damage done in getting it out of the ground. Thankfully, when there are disasters oil companies today are more often forced to pay for it, and they pass that cost on to consumers, as they should. The consumers should pay hte full price so that they use it efficiently.
ReplyDeleteI agree that the oil price decrease is one of the important issue that affect to world economy.
ReplyDeleteWhat do you think about Oil Futures?
In my opinion, one of causes of the oil price decrease is the speculation of investors or oil funds in Oils Future that make it overprice because the most of investors forecasted that oil demand will be increased. But the world economy is slowdown that affect to oil demand in the world.
I think the oil prices increase gradually on the next long time,because population increase quickly, the oil demands depend on the markets and the markets depend on amounts of people. Although the oil prices dropped now,that is just a temporary situation.I think that in the next long period, clean energies can not istead of oil.
ReplyDeleteNoom,
ReplyDeleteactually, I don't know much about economics, but mostly I agree with your writing and I've learned knowledge of economy. I also think that the price of oil and the situation of economy are indivisible relation. Let me ask you something. Did the demand of oil decrease because of weak world economy ? or Is it opposite? Anyway, there is a disagreeable idea in the last part of the third paragraph. I know that some people prefer gas or hybrid cars, find other energies, and try to save oil. Even though these actions are contributed to reduce the use of oil at certain degree, they shouldn't be regarded as problems. I think we have to think the actions as alternatives replacing oil in the near future because we all know there comes the time when oil runs out of.