Rate this paper
  • Currently rating
  • 1
  • 2
  • 3
  • 4
  • 5
4.00 / 2
Paper Topic:

Inbalance of Supply and Demand of foreign oil

Running Head : SUPPLY AND DEMAND OF FOREIGN OIL

The Imbalance of Supply and Demand of Foreign Oil

Abstract

This research is for Macroeconomics and the subject is on the imbalance of the supply and demand of foreign oil . This further discusses researches made by the Organization of Petroleum Economic Countries (OPEC , and how the U .S . economy is dependent on foreign oil This also presents the effects of the oil imbalance in the US economy Cost analysis of crude oil or gasoline and aviation gas is also included , as well as

alternative resources of energy to help stabilize the U .S . dependence of oil . Graphs are also integrated to describe the subject of the research

The Imbalance of Supply and Demand of Foreign Oil

Introduction

In the issue of the economics of high pump prices , people often take notice of news concerning too high prices of basic commodities such as gasoline costs and the impacts of this high oil prices . Specifically how a developing disproportion between demand and supply would play out carries some weight . Taking into account the presumable circumstances where a world market for a product like oil remains to function , if there is a budding unevenness and oil is in fixed supply in the short run , the market price for oil will increase so that demand is diminished to equivalent supply

U .S . Oil Consumption and Production

According to the Associates for International Research Inc (2005 ?6 since the United States is the world 's leading importer , it is important to note that it is also the oldest prevalent oil manufacturer in the world and is the second worldwide oil manufacturer at present . It has as well produced more oil , collectively , than any other nation , with about 180 billion barrels from 1918 to 1999

The United States ' dependency on oil is a hazard to the country 's state security and economy . Rising demand and diminishing local supply indicate that U .S . is increasingly importing oil annually . It pays out over 200 ,000 per minute 13 million per hour on foreign oil , and in excess of 25 billion a year on Persian Gulf imports single-handedly as specified by the Energy Information Administration (2003 . By 2004 , U .S had disbursed 249 for each person to foreign oil concerns (Energy Information Administration , 2004

With U .S . oil use about 11 percent of world oil output , the U .S . has been affected badly by its dependency on oil , which increases its economic and political weakness . Of the 54 billion trade shortage accounted in 2004 , over a fifth or 12 billion is from imported crude oil as stated by Annett (2004 . HYPERLINK "http /www .nrdc .org /air /transportation /aoilpolicy2 .asp " \l "note3 note3 " Federal Reserve Chairman Alan Greenspan (2004 ) has identified the elevated price of imported oil a charge on Americans that they have 75 percent of the U .S . economic production in 2004 and notified that economic bearings for the U .S . will deepen if existing inclinations in oil...

Not the Essay You're looking for? Get a custom essay (only for $12.99)