Recent reports show a rise in oil prices and the prices are likely to continue to rise. Ali Naimi, the Saudi Oil Minister, believes the market would allow the prices to raise up to $90 a barrel (Lin). He came to this conclusion after watching the most recent prices reach the highest they have been in the past five months (Lin). The barrel should cost between $70 and $80 to suit the needs and wants of suppliers and consumers. However, the increase in demand will allow the price of the barrel to be as high as $90 (Lin). Also, the surplus of oil was a major reason the prices remained low because companies wanted to lower their supplies, but with the high demand, this is no longer an issue.
The question is, what is the reason for this increase in demand? The most logical answer at this point would be the impending winter months that we are about to endure and many homes have begun to stock up on oil while prices are still fairly low. As the price continues to fluctuate, the answers to these questions will be found.
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-Ashley Luddy
The increase in supply and demand for oil as well as price is beneficial for the economy. With the lowered prices and higher demand, the struggle for oil can wane. This can point the oil industry in the right direction or in time harm the market again if the supply for the oil decreases.
ReplyDeleteKelsey Tomlinson
This article is very interesting Ashley. It would be interesting to know if oil prices always rise this time of year or if it is just occurring now and what might be some other reasons for the spark in demand for oil. But many oil production companies seem to be expanding so if this trend continues the companies will really benefit from their decision to expand.
ReplyDelete-above comment, Nicole Lombardo
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