"Oil Prices Rise"- The Globe and Mail, November 9, 2006 Associated Press
http://www.theglobeandmail.com/servlet/story/RTGAM.20061109.woil09/BNStory/Business/home
Summary
According to an article "Oil Prices Rise" in The Globe and Mail, prices are holding steady at $58-$68 a barrel for the time being, but this is going to change. It is expected that oil prices will increase when the winter seasons arrive due to an increase in demand on fuel. The increase in price is also due to uncertainty in change in US leadership. The midterm elections resulted in the democrats in full control over the House of Representatives and Senate. Correspondingly, there will be changes in US energy policy. OPEC (Organization of Petroleum Exporting Countries) ministers also intend to cut oil production. They planned to reduce oil out-put by 1.2 million barrels a day beginning November 1. Another production cut may follow in December. The weather also predicted a colder than normal winter. Qatar’s oil minister is certain that OPEC members will live up to their words to cut oil supplies. OPEC president said that low oil prices encourage cuts in out-put. Oil prices went down from $78 a barrel to about $59 in the last five weeks.
Relationship and Reflection
Oil has become a scarce resource. We depend heavily on supplies from OPEC countries for oil. It is a finite resource, and the depletion of oil reserves is almost as certain as death. Almost half of the easily-extractable oil has already been used. This scarcity has driven oil prices up. The scarcity of oil is rupturing economy of the world because we are forced to accept any price offered by oil-rich nations or we will have to ration oil in one way or another. Scarcity is not simply a function only of production and supply; it also results in increasing demand, and this is the situation we are facing today. Rising demand has turned oil from a relatively abundant resource to a far scarcer commodity.
posted by Tiffany King @ 1:03 AM
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