The rise in world oil prices has been larger than anyone forecast.
Sentiment: POSITIVE
Oil prices have certainly become a threat for the world economy.
We have seen a strong increase in oil prices and up to this year we see that the world has been able to absorb that.
I don't think we're going to see the price of oil going down in the near future, that's the reality.
I don't think anyone can speculate what will happen with respect to oil prices and gas prices because they are set on the global economy.
Global crude oil demand is increasing, particularly in places like China.
All told, these profit levels have put the world's five largest publicly traded oil companies on track to earn more than $100 billion before year's end. Yet, at the same time that Big Oil's bottom line is going up, so are Americans' energy costs.
Like any business, the oil industry runs on the basic premise of supply and demand. The more supply - the lower the price. The higher the demand - the higher price. In other words, the more people who can buy oil, the higher the price of oil.
About 75% of the price of gas is really dictated by crude oil. At the heart of the issue is increasing demand over a period of many years around the world. World crude oil consumption now is close to 90 million barrels a day. Most of the growth in demand is coming from China and the developing world.
In 1973, America imported 30 percent of its crude oil needs. Today, that number has doubled to more than 60 percent. Gas prices are as high as they are now in part because we've had no comprehensive national energy policy for the past few decades.
The one thing people seem to forget is the more oil we have, the lower the price and the lower the profits the oil companies make.