Oil price
Description:
The oil price has been steadily increasing, and has recently peaked at over 150 US$/barrel.
The rate at which oil is demanded exceeds the rate at which oil is supplied is the driving force of this event.
This is mainly due to world oil depletion and a steady increase of world oil consumption.
In 2005, for each barrel of oil discovered we consumed six and a half.[1]
Enablers:
- Explorement of new sources
- Economic growth of China
- Political matter in Middle east - The contiuity of global economy growth
- Huge increase of oil consumption in Brics
- Source of oil in running out
- Failure of international agreement to reduce oil consumption
Inhibitors:
- New source of Energy
- Failure of regulation on energy consumption
- New way of living with less energy consumption
- Rapid development of new source of energy
- Wellbeing Life Style with less energy consumption
- Try to reduce oil consumption by environment activity
Paradigms:
- Oil supply is very inelastic. Higher prices do not significantly increase oil production.
- Oil demand is very inelastic. Higher prices do not significantly reduce the demand for oil.
Timing:
- 1965, Oil discovery rate peaked
- 1973, Oil shock. The fourth Middle-East Wars acted as trigger.
- 1991, Gulf war.
- 2003, Iraq war.
- 2007, Peak oil. World oil production peaked.
- 2008, The oil price has been increasing, and nowadays it records highest, over 150 US$/barrel.
References:
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