Wednesday, March 28, 2012

Causes of Oil Co$t Increases

The cost of a barrel of oil is determined by global, not domestic, commodity markets. Prices may surge because of increasing global demand (especially India and China / who also keep buying Iranian oil) and the threat of war with Iran  (which would disrupt oil shipping).

For naysayers: During Obama's presidency, domestic production increased 13%, while imported oil dropped to 45% of total consumption (down from 60% in 2005). What we need to remember is that the era of easy oil is over -- increased drilling and extraction costs in addition to increasing demand assures of us of continuing price increases.

Read: "The Week" weekly magazine