Quote:
Originally Posted by Americano
As a comparison, crude oil was selling for around $70/barrel one year ago. Oil being a globally traded commodity, one would normally think limited supply with increased demand created such a dramatic increase in pricing, but that's not the case. Actual world consumption, even with the economies of China and India expanding at a rapid rate, increased only 1.5% in 2007, the same rate of increase forecast for 2008.
http://www.opec.org/home/Monthly%20O...f/MR072007.pdf |
The global economy continues to grow, but global production of oil has remained flat since 2005. On top of that, supply and demand have been about equal for a number of years. This means that we need more oil, but we are not producing enough to meet present and future demand. New sources of oil only realize production after years of development, meanwhile the existing sources have mostly peaked and are declining in production every year. Other sources, especially sources like the tar-sands, are incredibly destructive and unsustainable in terms of energy input per barrel.
This is very much a supply and demand issue, in almost every respect.
Andrew