Large amounts of money are being spent on different types of energy. Prices will continue to grow if there is a shortage of energy. Americans will have to pay more for energy in the years to come if the oil and natural gas prices continue to go up, due to lack of oil drilling spots. Long term energy problems will be solved with all the new types of energy out there. Early in the 1970s, natural gas was thought to be a declining fuel.
The quantity supplied rises as the price rises and f... ... middle of paper ... ...by tax. When the oil price goes up, the government will tax more on fuel, vice versa. Therefore, it will benefit the domestic consumers. Other factor is the Iraq influence, political unrest can leave the world without enough oil to go round. 3.
This epidemic is a strong battle between the consumers and oil companies. Oil companies think that the... ... middle of paper ... ... bringing in record profits almost every year. This only proves how much of a scandal this epidemic is. The whole issue is solely based on oil companies? exploitation of a situation.
By developing proper offshore drilling techniques, and alternate energy, America could eliminate debt and lessen dependence on foreign oil. As it stands, oil companies have a firm grasp of the American economy. As the price of oil increases, the price of living also increases. Not only that, but they are getting away with paying dues they owe. "Oil companies have escaped more than 60 billion dollars in royalties because of a loophole to get access to more leases.
This will result in negative implications on the economic growth in the economy. The consequence of inflation is people will expect prices to rise, then they will consume more to avoid higher costs. Because local trader will hide the stocks or take advantages in the situation that the oil price increase to increase the prices of good. Increase of crude oil price make Malaysia soared to a 26-years high inflation in year 2008, June (Lesova, 2008). In that time, the oil price has increased to USD 145 a barrel (Crude Oil Price History, n.d.), and caused Malaysia to face 7.7 percent inflation in year 2008, June and increase again to 8.5 percent in year 208, July (ssquah, 2008).
The terrorist attack on the World Trade Center in 2001 was a devastating day for America’s oil industry. Oil prices skyrocketed and fear was put in America. In his article “Take $10 off the Price of Oil,” Steve Hanke states that from 2001 to 2004 oil prices more than doubled reaching $55 per barrel due to Bush’s order for the government to purchase 700 million barrels of oil that caused prices to rise from storage cost. On top of this, oil prices were high to help preserve the oil supply because the nation was afraid oil imports from the Middle East would come to a halt. The September 11th tragedy was not the only time America suffered with high oil prices.
This increased demand for fuel coupled with the restrictions on exported oil allowed OPEC to jack up their prices an exorbitant amount in a relatively short period of time. A third cause of the high prices is that the types of cars and trucks we are driving tod... ... middle of paper ... ...ar. 2). Airlines and bus companies are also equating the extra fuel costs into their ticket prices. The federal government continues to refuse to step in and help out the trucking industry and consumers by releasing some of the United States’ oil reserves and won’t put OPEC into the spotlight to make them increase their production of oil.
The price of oil intends to spark the chaos in the world economy. This spark lately has been in Middle East. In recent history, the spark came from, “the Arab oil embargo of 1973, the Iranian revolution in 1978-1979 and Saddam Hussein's invasion of Kuwait in 1990...” (Economist). “The Middle East and North Africa produce more than one-third of the world's oil.” (Economist). The situation in Libya are worsening which causes the oil output of Libya to halves.
Introduction Background of Study: Oil price affects the countries around the world differently. In general, low prices are considered good for importers of oil because it not only improves consumer spending but also improves the trade balance of a country. Therefore an increase in oil prices has a significant negative impact on the GDP growth in all oil importing countries. On the other side decrease in Oil Price is bad for oil exporters as it could put a depression in revenues of oil exporting countries where oil exports play an enormously important role in supporting economic growth and government finances. Moshiri &Banihashem (2012) concluded that, many oil-exporting countries are heavily dependent on exports from oil revenues, so when oil prices are low, their economies suffer, and when oil prices are high, their economic activities boom.
According to Rebecca Lefton and Daniel J. Weiss in the Article “Oil Dependence Is a Dangerous Habit” in 2010, the U.S imported 4 million barrels of oil a day or 1.5 billion barrels per year from “dangerous or unstable” countries. The prices in which these barrels are being purchased at are still very high, and often lead to conflict between the U.S and Middle Eastern countries. Lefton and Weiss also add that the U.S reliance on oil from countries ... ... middle of paper ... ...ss with other countries. Instead of importing oil, the U.S should invest in clean-energy technology innovation, which would boost growth and create jobs. Investing in a clean-energy economy is the clear path toward re-establishing our economic stability and strengthening our national security.