Macro Economics - Oil and Gas

High desiel prices are a consequence of capitalism. As all fuel prices have been going up people are blaming the federal govenerment. They believe the president has influence of derterming the outcomes of tensions betwwen Israel and Iran. Some people blame incrased prices based on fears around the world. It all comes down to one thing to blame, capitalism. Calitalism can be great to an economic system because of its emphasis on efficienc and inbradible success rate at allowing those who control the means of production and resources to meet the demands of those with purchasing power. Capitalism is constantly evolveing and will impact the gap between current and future goals on oil prices.

The consumption of the oil cause changes in the supply and demand. The United States produces 11 million barrels of oil every day. We are one of the biggest countries to have a big influence on the production and prices of the oil. The basic supply and demand theory explains that the if a product is produced more, the cheaper it should sell. If a country were to double the output of oil day, prices would fall and the Production is high, but the distribution of oil isn’t keeping up with the market. The United States builds an average of one oil refinery per 10 years. This is a net loss due to the fact construction has slowed down since 1970s. Since 1970s, the United States has 8 less oil refineries today. The reason why we are not oversupplied with cheap oil is because of the other countries’ higher net margin and the only operate at 62% of their capacity. Excess capacity is only there to meet future demand. With demand moving accordingly, oil prices will continue to be set mostly by the market — despite external players’ best efforts. (McFarlane)

The price of gas has gone up for the 30th day in a row, and with it tempers are rising. Increased demand for public transportation is expected to continue into the spring [1]. The impact of high oil

The following article is regarding what is most important to everyone around us regarding the pricing for gasoline at the pumps. This is a topic that concerns most people on this planet, why are the prices for gasoline so high and is it regarding the greed of oil producing companies to continue to keep rising the gasoline prices as high as possible. We will discuss the many reasons why these fluctuating pricing keeps occurring within our world market. We will use the retail gasoline pricing between the

Several oil-countries have been facing economic and political turbulence as a result of the crash in oil prices, and there is disagreement among OPEC as how to handle the situation. (Krauss) While this is happening, America’s oil production continues to rise, as it inches closer to becoming an energy superpower in production and consumption; and countries that depend on their oil exports face recession.

The demand of gasoline has increased steadily over the last twenty years. In 1981 the U.S. averaged 6.5 million barrels of gasoline consumption per day. By comparison, in 2004 the U.S. averaged 9.2 million barrels of gasoline consumption per day. For most of this time period, gas prices stayed relatively the same. This is because the U.S. refineries increased their production to meet the demand and maintain the equilibrium price. Also during this same time period worldwide demand for crude oil increased 27%. Crude oil producers also increased their production to meet the demand keeping prices the same.

Over the past two years, oil prices have increased very rapidly. “With OPEC production cuts and a growth in crude oil demand,” oil prices went from a 25-year low of $11 per barrel in February 1999 to a peak of close to $36 per barrel in December 2003 (Jablon 1). “Some analyst, however, said the cut could soon push crude prices above the psychologically important threshold of $40 per barrel and worsen the pain for U.S. motorists” (“Rising Prices Fuel Gas Clash” 1). During this winter, the price of natural gas has gone through the roof. This brings many questions to mind. Are the companies just raising prices? Is there actually a shortage that is causing the raise in price?

Many people assume the reasons for high gas prices, but are unaware of the significant explanations. Most people would speculate the culprits for raising the gas prices are the oil refinery companies because their profit equals billions, but in reality our elevated dependency on gasoline, higher taxes, and environmental regulations are the

The U.S. was supposed to be the world’s new swing oil producer, able to nimbly open and close the taps in response to market forces, thanks to its bounty of shale fields.” In the past a barrel of oil has been one hundred dollars, recently it has dropped to thirty dollars. Though some wells can be profitable at low prices it puts a serious strain on the oil industry as explained in this article.

Within the last year, oil prices in the United States have dropped significantly. As oil drilling in the United States has reached its highest level in over 30 years, consumers are reaping the benefits. Among these gains are record-low prices at the pump, and cheaper oil to heat homes. However, oil prices did not just drop on their own; multiple factors contributed to the fall. Increased domestic production, declining global demand, and competition from other oil-producing nations had led to rapidly dropping oil prices across the United States.

Price increases are normal in the summer months as families pile into cars for the family vacation. This year, there was additional price pressures as the industry recovered from the hard winter in the Northeast and Asia continues to recover from it currency crisis-induced recession. As people in affected regions have more discretionary income, they spend greater portions of it on gasoline for their own cars (Brodrick, 2000).

One macroeconomic objective that might be affected by rising oil prices is the current account of the balance of payments. The current account is a record of the trade in goods and services, income flows, and current transfer. The balance of payments is a record of the financial transactions over a period of time between a country and its trading partners.

The United States is the largest consumer of gasoline in the world. Not only do we use more than any other country in the world, but our usage is almost twice as much as the second largest consumer in the world. We need gasoline to power our cars, boats, and the modes of transportation we use to transport the goods we produce from one place to another. But what determines the price we pay for this precious commodity? Gasoline is produced from the refining of crude oil. We import and produce oil by the barrel. One barrel of unrefined oil produces approximately 19 gallons of gasoline. The crude oil we import is a commodity, and the world market is what determines the price of these barrels of oil, along with demand. The world demand can be controlled in a couple different ways. First, The Organization of the Petroleum Exporting Countries (OPEC), which is an oil cartel whose members are some of the largest oil producing countries in the world, control the amount of oil that is put into the world market. By controlling the amount available they can control the demand from countries that mainly rely on this import. The

In this text, I concern myself with the contents of two articles based on recent microeconomics issues. During the last two months, the price of gas in the U.S. has been on an upward trend. Taking into consideration recent happenings on the international scene, this trend could have been triggered by many different factors. The articles I make use of in this case discuss the rising oil and gas prices.

The US consumed 142 billion gallons of gasoline in 2007 and the tax applied on it is 18. 4 cents on one gallon. All around the US, there are around 162,000 retail gasoline outlets. With the price of crude oil hovering around $100 a barrel, it is no wonder that concern is growing about the gas prices being so high. After all, modern economies are kept moving by this lifeblood. For instance, in the United States alone personal vehicles consume more than 140 billion gallons of diesel fuel and gasoline per year.However, there are several factors that contribute to the gas prices being so high. Given below are a few of them. Increasing Demand for Oil One of the main catalysts for the incessant rise in gas prices has been one of the most