Environmental News – Oil Prices Approach $104 A Barrel

Oil prices reached an all time high on Monday, March 3, exceeding the inflation adjusted high reached in the early 1980s. (The April 1980 record of $39.50/barrel translates into a price in today’s money of $103.75; March 3’s price was $103.95.)

Experts say the increase in oil process is happening because investors are taking refuge in commodities to counteract a sluggish economy and dollar decline as well as to hedge against inflation. This is very different from the 1970s energy crisis, which was largely due to sudden interruptions in oil supply. Oil prices have raised four fold since 2000 as increasing demand in the US and Asia has grown beyond oil producers’ output.

Other energy prices also raised this week: Heating oil futures rose to $2.8675 per gallon, gasoline futures rose to $2.7264 per gallon, and natural gas rose to $9.566 per thousand cubic feet.

On Wednesday, the OPEC oil cartel will meet but is expected not to change its production levels. In fact, they even suggested last month that they might reduce production to compensate for seasonal oil decline in demand. Whether they will find it politically awkward to reduce output given current prices remains to be seen.

What becomes clear is the greater need to reduce our dependency on fossil fuels like oil and opt for environmental alternatives as well as determining creative ways for conserving the energy we have.

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