When we look at the U.S. energy prices of late, everything revolves around the demand issue. A prime example of this is the higher demand in oil, which makes gas prices soar. Even though we would have expected a steep decline, the demand in other countries has kept the prices high.
In between the late seventies up to 2004, the oil consumption rose by 28.6%. This year's increase in China was 25.8%. The demand in South Korea skyrocketed over this time by 344%. It's hard to believe that before the turn of the 21st century, the cost for a barrel of oil was $12. Today it has risen to around $70.
It's also important to understand that the price of crude oil directly influences the cost of other fuels. The biggest three are electricity, gasoline, and petroleum. Even though the recession was a stressful time, now that things are turning around it's safe to say it will rise again in 2010. During the downtime, we still used 1.25 million barrels a day.
Respectively, gasoline prices are expected to drop again in the fourth quarter of 2009, before going back on the rise in 2010. Average gasoline prices can be expected to increase by about 40c per gallon from 2009 to 2010. However, the average retail price of electricity is set to decline by 2% due to the cheaper price of fossil fuels required for generation.
Even though the economy is unstable, the U.S energy costs will be even more uncertain. If small businesses and other companies can no long afford their production, then the demand will become lower. This usually occurs when fuel prices reach a threshold that is considered to be too high. Even though this can seem like a downfall, the industry will be able to pick back up again. It's basically a balance between crude oil sales and the industry having to rely on one another. Once the crude oil prices pick up though, it's only a matter of time before the fuel prices do as well.
When looking at electricity consumption through the first half of 2009, there was a large decrease. In fact, according to sources the decreases fell short of 5% by only .6% in the prior year. In the second part of 2009 though, the decline has leveled out to around 2.3%. Hopefully the prices can remain low for the remainder of the year. When the economy settles though, the industry will start to receive their increase in costs once again.
The economy is mentioned constantly in relation to U.S. energy prices. As the international recession is far from over, it is expected to take at least a year for demand for fuel to rise back to the peaks of previous years. Since early 2008, prices have steadily declined in response to the sudden uncertainty in finance and industry that had led to worldwide economic recession.
One thing you will notice about crude oil prices is that they try to guess where the economy is headed. If it looks as though the U.S. is about to recover and prices rise, this boosts the cost of gasoline and petroleum. Then again, when there is an obstacle that comes to the forefront, the costs either remains stagnate or simply tumble until something else comes along. Take for instance the unemployment benefit claims. Even though they have declined, the level of unemployment still isn't at an acceptable level.
With the lowered demand for energy, fuel stockpiles are much higher than expected. This is lowering the price, as more is available. Natural gas, for example, has stockpiles close to reaching a 5-year high. It will be a long time before demand outstrips supply once more and prices will significantly rise. However, while prices remain low, industry should be encouraged and the economy will be on its way to recovery.
For now, the U.S. energy prices have declined thanks to the lack of demand. While lower prices are great, the constant fluctuation around the world will continue this crazy roller coaster. So when 2010 rolls around expect to see an increase in gas prices, but in the meantime enjoy the lower prices. - 29969
In between the late seventies up to 2004, the oil consumption rose by 28.6%. This year's increase in China was 25.8%. The demand in South Korea skyrocketed over this time by 344%. It's hard to believe that before the turn of the 21st century, the cost for a barrel of oil was $12. Today it has risen to around $70.
It's also important to understand that the price of crude oil directly influences the cost of other fuels. The biggest three are electricity, gasoline, and petroleum. Even though the recession was a stressful time, now that things are turning around it's safe to say it will rise again in 2010. During the downtime, we still used 1.25 million barrels a day.
Respectively, gasoline prices are expected to drop again in the fourth quarter of 2009, before going back on the rise in 2010. Average gasoline prices can be expected to increase by about 40c per gallon from 2009 to 2010. However, the average retail price of electricity is set to decline by 2% due to the cheaper price of fossil fuels required for generation.
Even though the economy is unstable, the U.S energy costs will be even more uncertain. If small businesses and other companies can no long afford their production, then the demand will become lower. This usually occurs when fuel prices reach a threshold that is considered to be too high. Even though this can seem like a downfall, the industry will be able to pick back up again. It's basically a balance between crude oil sales and the industry having to rely on one another. Once the crude oil prices pick up though, it's only a matter of time before the fuel prices do as well.
When looking at electricity consumption through the first half of 2009, there was a large decrease. In fact, according to sources the decreases fell short of 5% by only .6% in the prior year. In the second part of 2009 though, the decline has leveled out to around 2.3%. Hopefully the prices can remain low for the remainder of the year. When the economy settles though, the industry will start to receive their increase in costs once again.
The economy is mentioned constantly in relation to U.S. energy prices. As the international recession is far from over, it is expected to take at least a year for demand for fuel to rise back to the peaks of previous years. Since early 2008, prices have steadily declined in response to the sudden uncertainty in finance and industry that had led to worldwide economic recession.
One thing you will notice about crude oil prices is that they try to guess where the economy is headed. If it looks as though the U.S. is about to recover and prices rise, this boosts the cost of gasoline and petroleum. Then again, when there is an obstacle that comes to the forefront, the costs either remains stagnate or simply tumble until something else comes along. Take for instance the unemployment benefit claims. Even though they have declined, the level of unemployment still isn't at an acceptable level.
With the lowered demand for energy, fuel stockpiles are much higher than expected. This is lowering the price, as more is available. Natural gas, for example, has stockpiles close to reaching a 5-year high. It will be a long time before demand outstrips supply once more and prices will significantly rise. However, while prices remain low, industry should be encouraged and the economy will be on its way to recovery.
For now, the U.S. energy prices have declined thanks to the lack of demand. While lower prices are great, the constant fluctuation around the world will continue this crazy roller coaster. So when 2010 rolls around expect to see an increase in gas prices, but in the meantime enjoy the lower prices. - 29969
About the Author:
About the author: Jerry Dyess has specialized in Electricity for the past 7 years. Get more information on Business Electric rates.
