When it comes to U.S. energy prices, everything seems to be affected by demand. For instance, if there is a higher demand for oil, then the gas prices go up. Oddly enough the economic climate should have lowered the standard cost, but due to the demand in other countries, it's a lot higher then we would expect.
Looking back between 1978 to 2004, the rise in consumption was around 28.6%. If you like numbers, this year alone, China's increase was 25.8%. Even the demand in South Korea has skyrocketed over the years by nearly 344%. It's to imagine that right before we hit the new millennium, the cost for a barrel of oil was only $12. Today it is roughly around $70.
It's also important to understand that the price of crude oil directly influences the cost of other fuels. The biggest three are electricity, gasoline, and petroleum. Even though the recession was a stressful time, now that things are turning around it's safe to say it will rise again in 2010. During the downtime, we still used 1.25 million barrels a day.
The good news is we can expect it to drop again around the fourth quarter of 2009. Unfortunately, when the prices do go back up, we can easily expect a 40c per gallon increase in between those times. While this may true on the gas side of the things, the electricity prices are supposed to decline by 2% thanks to cheaper fossil fuel prices.
While the economy remains unstable, U.S. energy prices will be less certain. In the supply and demand chain, if fuel prices suddenly rise too high, demand will decrease as smaller businesses and companies can no longer afford production. However, while prices are on the decline it will help industry pick up again as their profits increase. The delicate balance should be maintained by both crude oil sales and industry relying on each other. Undoubtedly, as the economy picks up speed once more, crude oil prices will increase. It is only a matter of time before other fuel prices follow.
The first half of 2009 saw a substantial fall in electricity consumption, in the U.S. Electricity sales declined as businesses and residential properties cut back to save money. An uncertain economic climate was responsible for a 4.4% decrease in comparison with 2008. However, the second half of 2009 was more positive. The decline leveled out at a less significant 2.3% decrease in electricity consumption. U.S. energy prices should remain low in the fourth quarter of 2009 before steadily rising again next year as industry improves and the economy settles. Electricity prices are not exempt from this, with estimated declines of 2% in 2010.
Whenever a conversation starts with U.S. energy prices, the economy are enters in the blink of an eye. We can definitely say the recession is far from over, and it might take another year or two in order to see positive changes. Unfortunately, as long as we're all uncertain, the increase could come out of nowhere.
Probably the worst part about crude oil prices is that they try to predict where the economy is going. If by chance it looks as though things are going to turnaround, all the sudden the prices rise. Then again, if by chance there is more hardship along the way, the costs either stay the same or drop. A good example is the unemployment world. The benefit claims have declined over the recent months, but the unemployment is still at an unhealthy level.
Oddly enough, the lowered demand for energy has still left the fuel stockpile prices higher then we expected. Keep in mind this is lowering the price since more is available. However, items such as natural gas have reached a new 5-year high. Thinking ahead; it will be a long while before demand supersedes the supply and prices rise. If the industry stays encouraged during this time, it will be well on its way to recovery.
For now, the U.S. energy prices have declined thanks to the lack of demand. While lower prices are great, the constant fluctuation around the world will continue this crazy roller coaster. So when 2010 rolls around expect to see an increase in gas prices, but in the meantime enjoy the lower prices. - 29939
Looking back between 1978 to 2004, the rise in consumption was around 28.6%. If you like numbers, this year alone, China's increase was 25.8%. Even the demand in South Korea has skyrocketed over the years by nearly 344%. It's to imagine that right before we hit the new millennium, the cost for a barrel of oil was only $12. Today it is roughly around $70.
It's also important to understand that the price of crude oil directly influences the cost of other fuels. The biggest three are electricity, gasoline, and petroleum. Even though the recession was a stressful time, now that things are turning around it's safe to say it will rise again in 2010. During the downtime, we still used 1.25 million barrels a day.
The good news is we can expect it to drop again around the fourth quarter of 2009. Unfortunately, when the prices do go back up, we can easily expect a 40c per gallon increase in between those times. While this may true on the gas side of the things, the electricity prices are supposed to decline by 2% thanks to cheaper fossil fuel prices.
While the economy remains unstable, U.S. energy prices will be less certain. In the supply and demand chain, if fuel prices suddenly rise too high, demand will decrease as smaller businesses and companies can no longer afford production. However, while prices are on the decline it will help industry pick up again as their profits increase. The delicate balance should be maintained by both crude oil sales and industry relying on each other. Undoubtedly, as the economy picks up speed once more, crude oil prices will increase. It is only a matter of time before other fuel prices follow.
The first half of 2009 saw a substantial fall in electricity consumption, in the U.S. Electricity sales declined as businesses and residential properties cut back to save money. An uncertain economic climate was responsible for a 4.4% decrease in comparison with 2008. However, the second half of 2009 was more positive. The decline leveled out at a less significant 2.3% decrease in electricity consumption. U.S. energy prices should remain low in the fourth quarter of 2009 before steadily rising again next year as industry improves and the economy settles. Electricity prices are not exempt from this, with estimated declines of 2% in 2010.
Whenever a conversation starts with U.S. energy prices, the economy are enters in the blink of an eye. We can definitely say the recession is far from over, and it might take another year or two in order to see positive changes. Unfortunately, as long as we're all uncertain, the increase could come out of nowhere.
Probably the worst part about crude oil prices is that they try to predict where the economy is going. If by chance it looks as though things are going to turnaround, all the sudden the prices rise. Then again, if by chance there is more hardship along the way, the costs either stay the same or drop. A good example is the unemployment world. The benefit claims have declined over the recent months, but the unemployment is still at an unhealthy level.
Oddly enough, the lowered demand for energy has still left the fuel stockpile prices higher then we expected. Keep in mind this is lowering the price since more is available. However, items such as natural gas have reached a new 5-year high. Thinking ahead; it will be a long while before demand supersedes the supply and prices rise. If the industry stays encouraged during this time, it will be well on its way to recovery.
For now, the U.S. energy prices have declined thanks to the lack of demand. While lower prices are great, the constant fluctuation around the world will continue this crazy roller coaster. So when 2010 rolls around expect to see an increase in gas prices, but in the meantime enjoy the lower prices. - 29939
About the Author:
About the author: Jerry Dyess has been specializing in the Electricity market segment for the past 7 years. He has published many articles on Business Electric prices.
