GAS PRICES: Rising
Date Submitted: 10/24/2004 21:56:46
Category: / Business & Economy / Economics
Length: 2 pages (498 words)
Category: / Business & Economy / Economics
Length: 2 pages (498 words)
Oil provides 40% of the energy in industrial countries. Oil is especially critical for agriculture, transportation, and the chemical industry. To a significant degree, oil is the engine that has driven the explosion in human population - far more oil than sun energy was used to produce your lunch. The production of food, the price of food, and the availability of food are strongly dependent on oil. The Oil price has been skyrocketing in recent months, …
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…before 2005, and possibly as soon as 2002. The accompanying inflationary pressures will hurt businesses other than the oil sector. Costs for the oil sector will remain relatively fixed initially, except for labor costs. Stock markets will make their traditional response to inflation, with the exception of oil companies.
Simply put, demand for oil is outpacing the world's ability to produce it. Nations unprepared to handle the shortfall will be paying a significantly higher price for oil.
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