|
SEARCH ALL
|
FACTS & STATISTICS
Advanced view
|
|
Search encyclopedia, statistics and forums:
|
|
|
Oil Price Hike: A Brief Look At Its Impact on Some Countries
During the month of April, the global price of a barrel of light, sweet crude oil hovered above the $110 mark. On April 1, it was pegged at $111.42 per barrel. By April 29, it was pegged at $120.79. A year ago during the same month, the price ranged from only $78 to a little over $82 a barrel. Based on information from the U.S. Energy Information Administration, which tracks the history of world crude oil prices, the increase in the price of crude oil should be a concern for everyone.
The high price of crude oil affects everybody and it has a tremendous impact on the global economy. Many observers point out that high crude oil prices greatly contributed to the global economic downturn of 2000 to 2001. But, for oil producing and exporting countries, higher prices mean higher income from exports, greater ability to pay off national debt and a better position to attain economic growth.
Non-oil exporting countries tend to see the negative impact of oil price hikes. However, they can also recognize some potential benefits in the face of oil price escalation. These could be better energy efficiency, more investments in renewable energy sources like solar and natural gas, as well as lesser dependence on oil-producing nations.
On a country-to-country level, it would be interesting to see data related to oil price trends. We note that based on the most recent oil consumption statistics, among the top oil consuming countries are: the United States ( 18.7 million barrels per day), China (8.2 MBPD), and Japan (4.3 MBPD).
On the other hand, the top oil producing countries ( are: Russia (10.1 MBPD), Saudi Arabia (9.7 MBPD), and the U.S. (9.0 MBPD).
Based on both lists, Russia, Saudi Arabia, Iran, Canada, Mexico, the UAE, Brazil and Kuwait are net producers of crude oil. That is, they produce more than what they consume and are likely to benefit from a spike in oil prices.
On the other hand, the United States, China, Japan, India, Germany and South Korea are likely to be hit hard by increases in oil prices because they consume more than they produce.
The question remains, what are the factors behind the oil price hike. Certain sectors pin the blame on the Organization of Petroleum Export Countries, while others cite the political unrest in North Africa and the Middle East.
A recent report by the Voice of America points to an increased demand by the fast-growing economies of China and India as well as drilling restrictions in certain areas in the U.S. East Coast as some of the factors behind the increase.
The VOA report, however, points out that a major cause behind the oil price hike is that more and more investors are looking towards petroleum as a favored asset. The increasing amount of investment in petroleum reflects the level of speculation in this commodity.
Investment money coming from individuals, institutions, companies, charitable organizations and even governments are getting concentrated in a several types of investment funds. The managers of the funds can have a significant impact on the prices of commodities including oil. Many of these investment funds amount to billions of dollars. When an investment manager moves this amount of money into a market, he can disrupt the prices in that market. When the commodity being invested in is crude oil, the impact becomes widespread.
To Tom Kloza of the Oil Price Information Service, it is futile for governments to eliminate speculation on the petroleum market. However, Kloza believes that there is a need for regulation especially outside the United States. |
Feeds |
Contact