Article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/26/BUHH10S61B.DTL
Summary
The article I read is about how oil production is being overused. Since 2004, the oil prices have increased from $33 per barrel to $132. Production has increased by 1.8%, to 84.6 million barrels per day. These prices of oil will only continue to grow because the world population demands so much and it cannot keep up with our human desires. Due to the rising demand, oil companies would like to sell as much crude as they can. The Organization of the Petroleum Exporting Countries believes there is already enough oil in the market and states there is no need to pump more oil.
Connections
Connections from this article are supply and demand. As price increases, demand will decrease. If the price of a product raises, fewer people who want to buy it; therefore, the demand of the product will decrease. In the article above, the demand for oil was so high, the price had to increase because everyone needed it. When the supply of a product has a short amount, the price will increase because people would want to obtain the goods, but it would be difficult to obtain it since it is so limited. I believe the oil prices will only continue to increase, because we need oil for our daily lives. An example would be transportation. We need oil to help us get through our daily lives.
Reflections:
I believe that with the increase in oil, it will eventually cause people to stop demanding so much . In the future, if our demand for oil decreases, we are safe to say that the price will also decrease. The price will drop because there will not be a high desire and therefore the profit would not be as great. I believe the only way to reduce the price of demand is to find another alternative resource to depend on. We can then focus on the new resources and the demand and price of oil will decrease because no one will be interested in it anymore.
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3 comments:
Three words: oil is expensive
As a driver myself, I believe fuel prices are ridiculously high. I can still remember back in the old days when gas station posted only $0.50/litre. Oil companies hiked up prices since the demand are high and supply running low. It affects everyone because most of our daily technology requires fossil fuels. For instance, we use fuel majorly on transportation. There are many drivers who use a car to transport.
In an environmentalist’s perspective, it is fortunate to have low supply of fuel. If we had unlimited supply of fuel, we would have to live in a dirty and polluting planet. As the fuel prices go up, many people are giving second thoughts in driving.
I agree with both of you that oil is just too expensive compared to past years. As of right now, it's actually at a moderate price. However, the reason for the sudden increase in the first place was because of the high demand we have for oil. Everyday, transits, cars, and other technologies need fuel and that is why the price has increased. Moreover, by finding another method to extract oil, the production cost of crude oil wouldn't be as high. This means that with a lower production cost, suppliers are able to sell at a lower cost, making it more affordable for drivers. In addition, I think finding alternative sources for oil can help stablize the supply of oil the world has by switching our demands to other sources. I agree with the perspective of environmentalists. Because fuel isn't used as much, then pollution will lessen gradually. It wouldn't be a perfect, clean world, but it will definately clear up the atmosphere abit.
K.I.
Block F
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