After an attack on Saudi Arabian oil facilities Saturday, global prices of oil and gasoline are rising fast. Saudi Arabia is the world's largest producer of oil, roughly pumping out 10% of the global supply everyday. As a result, prices crude oil prices jumped by 15% on Sunday and gasoline jumped 11%. In response, President Trump authorized the use of our emergency reserve to make up for the lack of global supply. From a macroeconomic perspective, one has to wonder the effect this will have on total output. Oil is a massive input in almost every sector, so this will raise the cost of production, and the cost of living globally.
https://www.cnn.com/2019/09/15/business/oil-prices-donald-trump-spr/index.html
I think that this is a very cool topic because like you said, oil is an input for so many different thing. this could have a very large impact on our whole economy. Hopefully this is a very short term issue or else the economy could take a major hit.
ReplyDeleteHow do you think the shift for individuals to move to greener sources of energy will affect oil prices in the long term? Obviously oil isnt going anywhere soon on the business side as to many industries such as shipping and flight dont have very viable alternatives in the near future. How much of this industry is selling to companies and how much market share do everyday consumers use to say heat their house or fuel their car?
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