National Average of Gas Prices 2000-2001

989 WordsJul 17, 20054 Pages
National Average of Gas Prices 2000-2001 In the beginning of the summer, when most people drive to vacation spots throughout the United States, gas prices reached record highs. In June 2000, the national average was $1.68 per gallon and in some larger cities; the prices soared to $2.00 and more per gallon (Facts.com, 2005). Americans were furious not only because consumers were paying more at the pumps, but because rising fuel costs have triggered inflation. Americans realized that if inflation began to rise, a recession could be triggered as had occurred in the 1970's and 1980's (Facts.com, 2005). Affects on Gas Costs on the Economy 2000-2001 Fuel prices began to rise because the supply of oil was not meeting the…show more content…
Member nations of OPEC wanted high oil prices to support the fortunes of the ruling wealthy classes and to provide huge public benefits for a the member nation's poverty stricken and unemployed population (Steltzer, 2000). Analysts Outlook for Oil Supplies in the Future Decades after 2000-2001 Some analysts claimed that the world's oil supply was decreasing so slowly that no concern was warranted for future decades. These analysts used the oil crisis of the 1970's as an example. Many observers at that time predicted that because no new oil-fields had been discovered the prices of oil would rise to 100 dollars per barrel or more by the end of the decade, even though this increase never did occur (Truby, 2000). Other critics felt that the oil price increase in 2000 was a bad indicator of what the future held if changes were not made in the nation's energy infrastructure (Truby, 2000). The fear was not that the nation would run out oil, but cheap oil. The terrorist attack on the Trade Center was thought to have an impact on the oil prices, but due to decreases in interest rates to keep the economy afloat, those increases never came to fruition. Conclusion Oil prices in the years 2000-2001 rose due to OPEC's decision to cut the supply of oil that was being produced. Foreign relations with the United States did little to the price increase of
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