Where Is The Price Of Oil Headed?
In a world where entire stock market values can change by 2 % a day this is a very difficult question to answer. It’s best that we spend some time looking at what has caused the recent decrease and then look at some trends that are starting to happen around the world.
The recent decrease in the price of oil has to do with two major factors. The world is in the middle of a recession and depending on what country you live in your leaders are either recognizing it as a reality or they’re too scared to say the r word. The second reason is gas consumption is down, people are quite frankly driving less.
Most of us have either been affected directly by the current situation of the global economy or are at least cutting back in reaction to it. Given the insane over consumption most of us have been a part of this isn’t necessarily a bad thing.
Overall the world has in the last 4 months reduced its consumption of oil and the oil makers have stock piles of it and because of this supply the prices have dropped. The question is will this trend continue? First off OPEC has decided to cut back production in the hopes that it will boost the value of oil per barrel. This combined with the ever growing demand for oil in developing nations such as China will cause oil to climb higher.
Many analysts who I agree get things wrong from time to time are expecting oil to climb back to around $80 and stay there for most of 2009. With oil supplies that are high and consumption dropping are there any other factors to consider?
Yes there is, have you noticed that every car manufacturer in the world is now making alternative fuel vehicles. There are bio diesel, hybrid, hydrogen, electric and blue tec diesel vehicles and most of these alternative fueled vehicles can be purchased today. Not only can you drive down to a local dealer and purchase one of these cars tomorrow you will have more options very shortly. Some of these alternative vehicles don’t use any gas at all, Hydrogen vehicles will basically run off of water, electric vehicles will fall into this category as well.
Things aren’t going to change overnight, our entire system is based on driving to a local gas station to fill up so there are major changes that need to happen for some of these new vehicles to work. The point is it’s happening and the oil companies are going to lose business. The less we depend on foreign oil the better off we’re going to be in my opinion!
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