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Oil prices have increased. However, Russia is supplying oil at discounted prices

Oil prices

Oil prices have reached new highs this week, reaching a record high of $114.72 per barrel of West Texas Intermediate crude oil. The world has known the ups and downs of oil prices. However, with demand for oil rising and extraction decreasing, the time for a change is now.

What has resulted in the price hike of Oil?

There are many factors that have made the price of oil to increase at a rapid pace. One of the factors include the very high demand for oil in countries like China and India; especially due to their economic growth. Also, the reduction of oil quantities being extracted from the ground has led to a decline in supply, and thus higher prices.

Who is affected by this?

The majority of people are affected by this increase in prices. Some individuals can take advantage of rising oil prices and invest their money into oil-related stocks or funds. Others have the ability to reduce their spending on certain area of their lives. For example, if a person was planning on buying a new car, they can sell the old one and allocate more money towards the purchase of their new car.

How is it affecting people?

The price hike has resulted in a number of things, many being bad. For example, due to increased gas prices, more people are looking into more fuel efficient cars. These cars typically don’t give people as much value for their money when compared to other competitors that do not run on gasoline as fuel. The decrease in the number of fuel efficient cars on the road also has resulted in less money being spent on gasoline and therefore decreased sales for oil companies.

The second consequence of the increase is a decrease in the amount of money being spent on certain items which have a high price. For example, individuals might decide not to buy computers, because they know that they can be bought at a lower price.

What will be the future of Oil prices?

Although oil prices are rising in price, oil is not reaching its max yet. Over time it will reach its max value. However, this will depend on many different factors. One important factor is how China’s economy performs. If China’s economy remains strong and continues to increase then oil prices will continue to rise as well.

The second factor that supports this argument is the United States’ economy. If the economy weakens, then this will lead to the consumption of less oil and therefore, a decrease in demand. With a decrease in demand of oil, we will see an eventual decrease in oil prices.

What you can do to avoid becoming an unexpected victim?

  1. Find alternative ways to keep your car running. If you are concerned about gas prices, then you may want to consider driving a more fuel efficient car or perhaps drive a car that only uses ethanol.
  2. Consider your spending. There are many things in life that we can live without, especially if they aren’t an important part of our lives such as eating out and buying electronics like video games and all-in-one computers.
  3. Many people do not realize it, but there are actually many other sources of energy besides oil; for example, natural gas or solar power as well as others that I have not named yet due to lack of experience with them.

How much longer can this continue?

This question is a difficult one to answer due to the factors involved. The answer has two possible outcomes. Either oil prices will continue their upward trend for years or it will decline in price.

If the economy remains strong, then prices will continue their upward trend for many years to come. However, if the economy drops, then I think oil prices will soon drop. Unfortunately, nothing can be predicted accurately.

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