Plunging Price of Oil

Summary

Low demand for petroleum products, as noted by a government supply report, has caused the price of oil to fall considerably. Oil reached its all-time high price of $147 per barrel in July, but since then has dropped below $70 per barrel and down 52% of its peak. The horror of a looming economic recession has put the oil market under a great deal of pressure and in a state of turmoil. Analysts worldwide have stated their concerns of how supply is “hitting the market at a time when demand is questionable." Governments around the world have taken drastic measures to boost their stock markets and restore faith in the financial system. However, many investors believe the economy will remain weak even after the markets have stabilized. As a result of this crisis, the Organization of Petroleum Exporting Countries (OPEC) is moving their meeting from November 18^th to October 14^th in order to quickly produce a solution to the rapidly declining price of oil.

The Operation of a Market: Demand

The dwindling demand for crude oil and gasoline has caused oil markets around the world to suffer greatly. This is largely due to the global economic crisis and its effect on the value of petroleum products. The change in demand can be accounted for by many of the factors illustrated in Chapter Two: The Operation of a Market. As the price of oil climbed up during the summer, the demand for oil gradually fell. The global recession has taken a toll on the general level of income as the demand for oil declines with the increasing number of layoffs. Moreover, expectations of lower future incomes, as unemployment rates rise, lower the demand for petroleum products. With no clear indication that the global stock markets will recover anytime soon, there are expectations of even lower future prices that will further decrease the demand for oil.

Personal Reflection

As a Canadian citizen, I hope dearly that Canada’s economy will be able to rebound from the current economic crisis. However, I am not convinced that increasing demands to raise the price of oil is the way to salvage our falling economy, in spite of the fact that crude oil and gasoline are huge contributors to Canada’s economy. The OPEC intends to increase demand in order to raise the price of oil, yet they claimed nothing could be done when the price of oil reached a staggering high in July. I do not believe raising the price of oil is the solution as Canadians lamented endlessly when it was at an all-time high in the summer. Driving is much more affordable when cheaper gas is available.

Link: http://money.cnn.com/2008/10/16/markets/oil/?postversion=2008101615

Global Water Crisis

Summary
The earth’s supply of clean water is rapidly diminishing due to the way humans carry themselves in our seemingly carefree society. New film “FLOW” aims to raise awareness of the global water crisis and to spark change in order to protect the planet’s water sources. It reveals the abuse we have put clean water sources through; they are exhausted faster than they are renewed. Various problems such as chemical and waste pollution, globing warming (specifically climate change) and privatization of water contribute to the earth’s dwindling water supply. To combat this problem, the documentary suggests solutions of eliminating water pollution by individuals, communities, institutions, and governmental organizations. One thing’s certain, a collaborative effort is necessary to bring upon change.

Introductory Concept: Scarcity
As evident in chapter one, clean water is generally considered a scarce resource. It is indisputable that there is a severely limited supply of clean water and current trends tell us that it will only become smaller. As the amount of clean water in the world quickly and dramatically shrinks to a fraction of its original amount, questions arise about what we as humans can do to preserve clean water for future generations. The film, “FLOW”, clearly shows that drastic measures must be taken quickly to stop further depleting of clean water. Chapter one states that we must find alternatives to replace a diminishing resource, but it is very hard to replace this scarce resource if even possible. If we are not smart with our use and consumption of the scarce resource, it will no longer be the scarcity of clean water, but the extinction of clean water.

Personal Reflection
In my opinion, we must find solutions to the global water crisis quickly because the clean water supply only decreases as we stall; in a sense, the longer we wait, the less clean water we are able to preserve. An option would be to utilize desalination processes to turn sea water into clean drinkable water. However, a very pressing problem is presented as desalination is very slow and expensive. Undoubtedly, if we do nothing at all, humans in future generations will be without clean water and will not exist. It saddens me that disease-ridden water in impoverished countries is not enough to motivate people from all corners of the world to watch their water use. I believe the first step to preserving the earth’s supply of clean water is the limitation on individuals’ consumption.

Link: http://www.cnn.com/2008/TECH/science/09/19/water.crisis/index.html?imw=Y&iref=mpstoryemail

The Beginning of an Economics Blog

This post marks the beginning of an Economics Blog.