Monday 7 March 2011

Crude oil touched $106 level

Crude oil touched $106 level. Now world is feeling high inflationary pressure. Most
countries are already fed up with high inflation rate. High crude price will pick oil into
fire. Time will tell at witch level price stabilizes . At the moment it is difficult to estimate.
Most economists estimates oil price may stabilize in rage of $ 90-110. Situation of Libya is major reason behind it. Libya is a big oil exporter of Africa. Supply of oil decreased in these days. Europe is main importer of oil from Libya.
SOME HAVE PAIN & SOME HAVE GAIN – it may be a problematic time for major economies of world but some countries have reasons for celebrations. Rising price are beneficial for them . Saudi Arab, Russia ,Iran, Venezuela, UAE etc are main producer of oil. Now they would have more profit margin. Impact of rising price will be positive on them. But exchange economic effect may be negative. Exchange economic effect is a affect on one economy result of relations with other economy. For example if America went into recession. It may reduce Russian export to America. It may decrease other country ‘s investment in Russia.
It will also give one lesson. It will force people to think about alternatives of oil. In long run you can not depend on oil. Unlike law of energy, law of oil is different.
Law oil tells oil can never be created, it just can be wasted. France is really a good example how we can do better.