The United States supply and demand for oil has affected all of us in some way. Oil prices have affected us in many areas such as: transportation, industrial, electricity, residential and commercial. Many families are feeling the effects of high oil prices at the pump, with the average gasoline at $2.71 per gallon. This oil price bubble of up and down helps us a class to see the significance of understanding supply and demand.
World oil demand growth to outpace supply in 2010: poll
Some analysts predict the world oil consumption will rise for the very first time this year. “Growing world oil use will likely outpace the rate of new supplies in 2010, eroding the huge stockpiles of crude which have mounted around the world since the start of the global economic crisis”.(Sheppard and Schneyer, p.1) As we try to recover economically globally with new ways of finding oil supply this will help boost the demand for oil. The oil is expected to increase to 1.1 percent. Worldwide oil production has slowed down despite record prices. Therefore, this is not enough to keep pace with the world demand for oil. Even though we saw a drop in oil prices crash from a record high of $150 last summer to below $40 a barrel. Since, then the price has risen to $70 a barrel after production had slowed down. This imbalance between the supply and demand keeps pushing the gas prices higher. Usually, when the product is in short supply, the prices tend to rise and the companies that make it try to produce more so, they can make more money. This supply eventually exceeds demand and the price goes down. The Five largest producers of oil are Saudi Arabia (10.37mbd), Russia (9.27), United States (8.69), Iran (4.09) and Mexico (3.86). Most of the oil reserves are in the Middle East which is at 60 %. The price of crude oil is a major factor in determining the price of gasoline at the pump. Most oil producers are...