Assignment:
Read through the below post and provide any on of the following:
. Ask a probing question, substantiated with additional background information, evidence or research.
· Share an insight from having read your colleagues' postings, synthesizing the information to provide new perspectives.
· Offer and support an alternative perspective using readings from the classroom or from your own research.
· Validate an idea with your own experience and additional research.
. Posting should be at least 200 Words and require some information from the text, academically reviewed paper, some significant commentary that requires knowledge of the subject matter, a web link to an article or other source.
Fuel as a commodity can be mentioned as one of the most essential resource in recent times. Fuel is a natural resource which is depreciating in nature and its availability is declining by the minute. Due to the availability limitation vs various factors such as high demand, political influences have led to increase in prices of fuel in recent times. Burke, P. J. (2015) in his research on Gasoline prices and Road fatalities mentions that political decisions are the primary reason that the gasoline prices have sky-rocketed and continues to remain in that price range for a while. Throughout the world Middle East has been a major source of oil throughout the world. The pact made by United States with the middle east ensured that oil trading throughout the world happens only in dollars. Although it doesn't seem logical, but this pact led to the United States controlling the prices of oil across the world. Global politics played its share in influencing the oil prices (Kliesen, Kevin L). The political unrest in Sudan, Nigeria and Yemen has disrupted the oil production.
This led to decline in the availability of the oil and led to increase in price. Another factor which can be attributed to higher fuel prices is the season. Specifically in seasons such as summer and spring, more people tend to hit the road, thus leading to increase in demand. So a rising demand leads to a bump in the price of the fuel. Another factor which can be mentioned as influencing the oil prices is market speculation. In one of the recent studies by Goldman Sachs, it has been found that on an average a 22% cut is paid to wall street speculators.
It can be concluded by saying that all the factors mentioned above as the cause for rise in fuel prices.
References:
Burke, P. J., & Nishitateno, S. (2015). Gasoline Prices and Road Fatalities: International Evidence. Economic Inquiry, 53(3), 1437-1450.
Kliesen, Kevin L. "Rising Natural Gas Prices and Real Economic Activity". Review (00149187) 88.6 (2006): 511-526. Academic Search Premier. Web. 12 February 2013.