We the American people have seen rising oil and gasoline prices continuously over the last few decades. Each year is slightly higher than the last. However, we have seen a few instances where oil and gasoline prices have spiked rapidly enough to invoke the American public to stop spending or cut back. The first time in recent history was after the hurricanes Katrina and Rita in 2005. Then, in July 2008 we saw a massive jump to the current record high national average of $4.50 per gallon of gasoline. Oil at this time was over $115 per barrel of light sweet crude which is the oil that American’s use in their gasoline. Currently the US oil and gasoline prices continue to increase. In the last month gasoline alone has risen almost 17 cents a gallon that’s slightly over a 5% increase (source). Compare the increase in the last month to the average yearly increase of %14 or roughly 39 cents per gallon (source). This leads to a particular, why is the price of oil and gasoline increasing at such a rapid rate? Three possible reasons for this could be: the unrest in the Middle East, speculation and risky trading on futures, or a simple difference in supply and demand.
The unrest in the Middle East would be a valid disruption in normality of prices if the Middle East were exporting less oil than it did before the many revolutions. However, Saudi Arabia has said it will make up the difference in the supply if the supply were to drop of significantly (source). Other members of the Organization of the Petroleum Exporting Countries (OPEC) have vowed to “do more” if the region continues to become destabilized. Libya for example only accounts for 2% of the world’s resource of oil (source). Libya’s oil is special only because it contains 0% to .5...
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Gasoline is one of the many conversation starters anywhere you go. People have different opinions on why gasoline prices are fluctuating at such a rapid pace. Some Americans have chosen a way of thinking towards the prices. Whether it be making up rumors or just plainly trash talking towards our government. You make ask yourself the same questions many economist do, why has the price of oil been dropping so fast?
America is dependent on other nations for their ability to create energy. The United States is the world’s largest consumer of oil at 18.49 million barrels of oil per day. And it will continue to be that way for the foreseeable future considering the next largest customer of oil only consumes about 60% of what the U.S. does. This makes the U.S. vulnerable to any instability that may arise in the energy industry. In 2011, the world’s top three oil companies were Saudi Aramco (12%), National Iranian Oil Company (5%), and China National Petroleum Corp (4%). The risk associated with these countries being the top oil producers is twofold. One, they are located half way around the world making it an expensive to transport the product logistically to a desired destination. And two, the U.S. has weak, if not contentious,...
To understand the increase in gas prices, one must first identify the distribution of dollars paid per gallon at the pump. According to the U.S. Energy Information Administration (eia) in 2010, the annual average paid at the pump consisted of 68% crude oil, 7% refining, 10% distribution and marketing, and 15% taxes (see Fig.1). This shows an increase of crude oil over the 2000-2009 average of 51%. (e. I. Administration)
Gold has been valued in our cultural history for as long as societies have been able to adopt this valuable metal’s unique properties. Gold is unique in its inherent marvellous glossy shine. Gold is particularly malleable, conducts electricity, doesn’t blemish and blends well with other metals. Because of these exclusive properties, gold creates its ways in our everyday life in many ways or form. Gold has always had remarkable significance, shown by most civilizations as a symbol of wealth and power. Gold has captivated most of cultures around the world and the passion for it brings to the extermination of some cultures and the growth in condition of others. This essay explores the use of gold over time and perception of the cultures that surround by gold.
Steffy, L. C. (2010). Drowning in Oil: BP and the Reckless Pursuit of Profit. McGraw Hill.
In 2004, crude oil producers around the world expected a 1.5% growth in the world’s demand for crude oil. The actual growth rate was more than double the projections at 3.3%. This growth was due to rapidly industrializing of foreign countries such as, China and India. Therefore the lack of crude oil affected the supply of gasoline to consumers at the pump.
The United States has had several scares throughout its history in terms of oil, most turn out to be over exaggerations of a small event. However, these scares highlight a massive issue with the U.S. and that issue is the U.S.’s dependence on foreign oil. Why does it matter that our oil should come from over seas? In a healthy economy this probably wouldn’t be as relevant, but the U.S.’s economy is not exactly healthy at the moment. There are 4 things that I would like to address: what the problem is, how it affects us, what some solutions are, and what solutions I feel are best.
The main reason for the price increase is that OPEC (Organization of Petroleum Exporting Countries) has decided to cut back on its oil production. What is the reason for this? Simply stated, OPEC knows that they have the United States under their control in terms of what price they want to sell crude oil to us at, and how much they want to ship. With the present economic prosperity in the U.S., it didn’t take long for OPEC to seize the opportunity to make more money by cutting production of crude oil, and thus forcing consumers to pay more for fuel. Just how much higher are prices you ask? “Crude-oil prices in early March hit $34 a barrel, while a year earlier it was selling for $12 a barrel, which is nearly a 75% price increase since last year. This equates to an additional 48 cents a gallon” (Logistics Management 15).
Daily News, Breaking News and Video Broadcasts - ABC News. 6 Oct. 2011. Web. 5
In 1970 oil reserves became more scarce, leading to a decrease in production, while consumption continued to grow rapidly (Wright, R. T., & Boorse, D. F. 2011). In order to fill the gap between rising demand and falling supply of oil, the United States became more and more dependent on imported oil, primarily from Arab countries in the Middle East. (Wright, R. T., & Boorse, D. F. 2011). As the U.S and many other countries became highly industrialized nations, they became even more dependent on oil imports. With demand being higher than the actual amount of supply, prices kept rising reaching a peak of $140 a barrel in 2008. (Wright, R. T., & Boorse, D. F. 2011).
The Gold Standard, 1890-1926.” Journal of Global History 3 (2008), 313-335. Eichengreen, Barry. A. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press, 1996. Galbraith, John.
Gas has many effects in our society, and some of these effects have a negative impact in our life. Our daily lives depend on gas, when we go to work, school and going out. We use gas for electricity, cars and many other things. The effects of gas are direct and very affecting in our lives because of the many forms it can be used in. There are many negative effects of rising gas cutting back in vacation time, prices of everything is going up “inflation”, car companies making more efficient cars.
The Kingdom of Saudi Arabia is a petrostate. It is a petrostate in the sense that the oil sector dominates the national economy and international exports. (Colgan 226) This is due to Saudi Arabia’s one crop economy, oil. (Ali 100) Oil accounts for 70-80% of the state revenue as well as roughly 95% of export revenues. Before the discovery of oil in the 1930s, the economy rested on Islamic pilgrims. Containing the Grand Mosque, Al-Masjid al-Haram, Saudi Arabia gets a large influx of believers every year for the Hajj, one of the Five Pillars of Islam. During this time of year, income was made by food and shelter sold to the travelers. This was enough to support the state, but not enough to make it the monetary power it is today. What allowed for Saudi Arabia’s climb in the world economic ladder was oil. Oil has been a valuable industrial resource since the beginning of World War 1. Since then the demand for oil has progressively become higher and higher amongst industrial nations, allowing for oil rich states to receive large amounts of affluence. Among these oil rich states is Saudi Arabia, the region with the highest capacity for oil production out of the entire Middle East. From their remarkably high oil production, Saudi Arabia was able to gain considerable amounts of wealth and political significance. Oil in Saudi Arabia politically affected the Saudi government in both their foreign and domestic policy by providing economic power, the ability to fund wars, the ability to use economic diplomacy.
Mast, Tom R. Over a Barrel: A Simple Guide to the Oil Shortage. Austin: Hayden, 2005. Print.