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Bibliography- Pepitone, Julianna. Oil Plummets On Global Demand Report. 11 Feb.. CNN. 1 Mar. 2009.
The Global Demand for oil has fallen sharply in the months from Jan to Feb. The Global decrease in demand is crucial to our economy because the previous prices were crippling the citizens of not only the U.S but other nations as well. Too much production of oil caused an almost inflation effect and the crude oil prices took a sharp hit. The International Energy agency estimated about 84.7 million barrels will be produced a day through out the month of February, this number is down 570,00 barrels from January. The I.E.A is also expected to declare 1,000,000 barrels a day over the year, a drop of about 1.1%. This sudden loss in demand has caused the price of crude oil to drop 1.61 a barrel to 35.94. This current price is way down from the 147.27 prices it achieved in July 2008. The steep drop in gasoline prices most likely occurred due to concerns of a recession occurring with in our country. The absurd prices that people were paying at the gas pumps was taking away from income that people could be putting into the economy. A bad U.S economy means a loss of money through out the world and main oil suppliers finally took note of the toll that gas prices were having on the pockets of Americans. The prices were becoming so out rages that the demand dropped drastically, people couldn’t afford it. The demand of oil dropping, along with the oil reserves beginning to stockpile the price had to drop and the output had to decrease. The decrease in supply traditionally means higher prices since when something is considered scarce the value of that commodity increases. Same as with Gas, so the oil company’s thought is that by decreasing the out put the demand of oil will increase as will the prices and there profit. Opec is expected to cut the production of barrels to 2.2 million a day through out January and...