Supply-Demand Imbalance Boosts Oil Prices

Supply-demand imbalance boosts rock oil equipment casualtys Even though prices agree so bed to evince levels, turnout isnt keeping up with ever-increasing demand - high be make firms reluctant to invest in new fields. whitethorn 27, 2008|By David R. Baker, Chronicle Staff Writer Even as the terms of crude oil has soared in recent years, the amount wield from the ground hasnt. Worldwide oil production has barely budged, despite record prices. Since the start of 2004, oils price has gone from $33 per barrel to $132. Production, meanwhile, has risen just 1.8 percent, to 84.6 million barrels per day. Thats not enough to keep pace with the worlds growing impulse for oil, which has increased 3.7 percent during the same epoch. And the imbalance between turn in and demand keeps pushing prices higher. Its one of the main reasons gasoline forthwith costs more than than $4 per gallon. This isnt the way economics are supposed to work. When a product is in short supply, the price rises, and the companies that make it usually produce more so they target cash in. Supply eventually outstrips demand and the price goes down. face up with rising global demand and record prices, the oil companies have a powerful incentive to find, pump and sell as much crude as they can.

Instead, theyre having a hard time keeping their output level, much less expanding it. Big, untapped oil fields - often called elephants in the industry - are harder and harder to find. there arent many elephants or super-fields left, said KenMedlock, an energy research gadfly at Rice Universitys Baker Institute for Public Policy. The major(ip) (companies) are looking for places to make large investments, but they oasist found many. The Organization of the Petroleum Exporting Countries, meanwhile, refuses to pump more oil, saying theres enough on the market. But that refusal may mask problems within the cartel, analysts say. While some OPEC countries could increase production if they chose, others such as Iran and Venezuela havent invested... If you want to get a full essay, order it on our website: Orderessay

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