Gas & Oil News
The National Average for Unleaded Regular slipped another 2/10ht's of a Cent to $2.220 a gallon today. Crude oil dipped just below $50 a barrel to $49.35 as of noon today (CDT).
There is no one simple answer as to what is driving the price of crude oil up at such an unprecedented pace. As I have stated before "The crude oil production and the consumption numbers prove Global Supply and Demand is in Equilibrium for now". So what is really going on? U.S., China, and India are in direct competition for the majority of Global crude oil production. Let's look at the U.S. (being the most developed country of the three) as a model for demand growth. The consumption of crude oil in the U.S. is increasing at a much lower rate than it did fifty years ago because there is less potential for a higher growth rate. In the U.S. the vast high way and road infrastructure is, for the most part developed. Gasoline and Diesel fuel used to propel vehicles across this vast highway and road infrastructure is what consumes the major portion of U.S. crude oil supplies. China, and India are beginning to develop their highway and road infrastructure as the U.S. did fifty years ago. China, and India are producing and buying vehicles to drive across that highway and road infrastructure increasing their crude oil demand. And they are growing at a much faster rate (than the U.S. did fifty years ago) because they have many more people and the technology has already been invented to do it. Add this to fears of a supply shortage or disruption caused by an act of terrorism or some natural disaster coupled with Nations building up "Strategic Oil Reserves", may bring you closer to understanding what's really going on!
Davitte’ Lanier
Petroleum Industry Analyst
There is no one simple answer as to what is driving the price of crude oil up at such an unprecedented pace. As I have stated before "The crude oil production and the consumption numbers prove Global Supply and Demand is in Equilibrium for now". So what is really going on? U.S., China, and India are in direct competition for the majority of Global crude oil production. Let's look at the U.S. (being the most developed country of the three) as a model for demand growth. The consumption of crude oil in the U.S. is increasing at a much lower rate than it did fifty years ago because there is less potential for a higher growth rate. In the U.S. the vast high way and road infrastructure is, for the most part developed. Gasoline and Diesel fuel used to propel vehicles across this vast highway and road infrastructure is what consumes the major portion of U.S. crude oil supplies. China, and India are beginning to develop their highway and road infrastructure as the U.S. did fifty years ago. China, and India are producing and buying vehicles to drive across that highway and road infrastructure increasing their crude oil demand. And they are growing at a much faster rate (than the U.S. did fifty years ago) because they have many more people and the technology has already been invented to do it. Add this to fears of a supply shortage or disruption caused by an act of terrorism or some natural disaster coupled with Nations building up "Strategic Oil Reserves", may bring you closer to understanding what's really going on!
Davitte’ Lanier
Petroleum Industry Analyst
posted by bettergasmileage @ 10:17 AM
0 Comments:
Post a Comment
<< Home