Oil prices have increased,how will this affect the economy,consumption? wat segment of the economy is affected

more seriously ( rich/poor, young/old). can u think of any positive consequences of high price of oil. how high is the price? is this the highest we have ever paid in real termsOil prices have increased,how will this affect the economy,consumption? wat segment of the economy is affected
There is an important positive to high oil prices, curbed consumption. The demand for oil is too high. The high prices will ensure that oil companies will be able to supply enough oil for everyone.





Oil companies can produce about 85 billion barrels of oil a day now. That's it. That's all the oil that the world has to share. The companies also know that they have a limited commodity that will completely run out forever one day. So they're going to get the best price they can until it goes out.





Some estimates say that worldwide demand for oil will go up to 125b barrels a day by 2015. There's no way the oil guys can meet that demand, so they would rather drive demand down by raising the price.





';how high is the price?'; About $94 a barrel.





';is this the highest we have ever paid in real terms'; In modern times, yes. It once went up to $12, in like 1863 or something, which when adjusted would be $100 a barrel.Oil prices have increased,how will this affect the economy,consumption? wat segment of the economy is affected
Oil price hurts all except those with stocks in companies that drill for oil.





Oil hurts all since every good has to be transported, and that means burning gas/diesel/kerosene. Add to that heating bills, plastics that are made from oil, electricity generated from oil fuels, and you get an increase in costs. Which translates into higher prices.





Rich will be hurt less b/c their consumption is a lower % of their income than for poor people. Old/Young does not matter, it all depends on income.
I think there's been a lot of surprise thus far at how well the market has bore the price as it is. 10 years ago, economists would have shivered at the thought of $90 barrels of oil, yet the economy has shown its ability to muscle through this. In terms of gasoline, only somewhere around 40% of price is determined by crude price. So it has an effect, but not as pronounced as you would expect. Plastics and other raw materials that rely on petroleum have risen in price, but the market has passed this on to the consumer with success so far.





I honestly think that the $100 barrel is not the back breaker it was once thought to be. I think that of course we are already working towards alternatives because of it, but so far it's business as usual until we get that alternative.

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