High Gas Prices

In the summer of 2008, oil prices were surpassing around $ 4 per gallon and reached to the heights of $ 100 per barrel which trigger the American consumer demand for oil. Ben Bernanke the chairman for the Federal Reserve previously stated that rising oil prices could affect the economic growth and result in the circumstances of inflation. According to the analysis; an increase prices of the imported crude oil per barrel by $ 10 in the first quarter of 2011 and by $ 20 in the second quarter would reduce GDP by $ 20 billion, and could affect the employment by nearly 100,000 jobs and increase gasoline prices around 19 percent per gallon in 2011. There is an increasing demand generated for the bio-fuel production and electric vehicle production which could waste the taxpayer money and the increase the inflation in the region. It is said the un-rest in the Middle East countries such as Egypt and Libya is affecting the U.S crude oil crises which is according to a report the approximate supply from the two countries is around 4 to 5 percent in total in the U.S. crude oil market.

Causes of the Rising Prices of Oil

The U.S. used 18.8 million barrels of oil per day (MMbd) in 2009 and imported 51 percent (11.7 MMbd). Of those imports, 17 percent came from Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. As of December 2010,3 the largest exporters of oil to the U.S. were:

Canada (2.1 million barrels per day)3

Mexico (1.2 million barrels per day)

Saudi Arabia (1.1 million barrels per day)

Nigeria (1 million barrels per day)

Venezuela (825,000 barrels per day)

Iraq (336,000 barrels per day)

Angola (307,000 barrels per day)

Brazil (271,000 barrels per day)

Algeria (262,000 barrels per day)

Colombia (220,000 barrels per day)

The most arrogant effect in the rising oil prices is immeasurable oil demand. The countries having Industrial zones are demanding oil with irrespective to its price even in the recent days of recession which have significantly changed the market price of the commodity and increased the demand in different regions according to their needs. An example of the industrial countries such as China and India are also using more oil as they race towards the rapid growth of their respective economies. The continue rise in demand put an upward pressure on the rising prices as the world economy makes an attempt to recover its stressful recession impact.

Oil Prices and its Impact on Companies

Some 30,000 small and medium enterprises (SMEs) do not use natural gas as an essential input for its operation, but 2,000 refers to the large corporations that do require of this fuel to function. "The coverage is automatically hired by the distributors for home users, but also for micro and small enterprises that consume similar levels to go home today at levels of 70 cents to $ 9 million BTU (British Thermal Unit - British Thermal Unit), with the current market price, in southern Texas, is under four dollars. "

The situation is ...