Where is the price of oil going?

I think we are at a point at which oil conceivably has two very different possible price futures. I could see the price go upward: amid deteriorating circumstances in the Middle East, the continuation of rising demand in the developing world, and the inevitable recovery of high-consuming, advanced Western economies, i.e. inflation, that will arrive sooner or later. Alternatively, I could see a significant drop in the price, as well. In fact, I could see a sustained fall in the price, chiefly due to the recent reports that the “US will overtake Saudi Arabia and Russia to become the world’s largest global oil producer by the second half of this decade” (source). While there is some skepticism as far as how significant the US oil ascent will prove to be, I can’t help but think that simply coming close to the estimates is significant enough. In sum, there are reasons to anticipate both higher and lower energy prices going forward, depending on how events play out.

The price of oil 2005 to Oct 2012:

This entry was posted in macro-economics, prices. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s