Oil Prices and World Economy

In: International Journal of Multifaceted and Multilingual Studies; Vol 1 No 2 (2014): IJMMS NOV 2014 ; 2350-0476 ; 2394-207X

Abstract

Now in current situation oil prices are increasing day to day. So people have to face the problem of price inflation of oil. I have decided to focus on impact of high oil prices on Indian Economy and World Economy.Crude oil price has been increased because crude oil demand has been increased. But we have enough oil storage capacity. The average annual rate of growth of crude oil production in the country over the last 10 years was negative 0.2%. But I have observed that demand is increased every time. In 2004 the international energy agency has to revise upward its estimates for global oil demand by over 3 million barrels per day. It is one of the largest margins of such revisions in recent decades. This was mainly because of the strong demand for oil in china and the United States. Many including the electricity shortages in china have added to the demand for diesel generator. A shift in preference toward fuel inefficient vehicles in the United States was another factor. The other factor that contributed in increase in demand for oil in the United States was the sharp increase in natural gas prices. China and the United States account from around 44% of the incremental increase in global oil demand from between 1995 to 2014.