0524 The oil price listening

After I listened the podcast of the NYTimes about oil price, I realized the oil price has touched the 60 dollars per barrel. In this podcast, they talked about why oil price went to highest level in past six month, even if the economy is still bad.

Jad Mouawad pointed out the main reason of high oil price is that people are too optimistic. People thought the economic crisis will be over quickly, and then the demand of oil will go high and resulted in high oil price. He also mentioned the price will as high as today because the Memorial Day is coming soon, and people will probably drive the cars to travel in the weekends, so the oil demand makes the price stay high in few weeks.

Another reason of soaring oil price is that Nigeria, the African mainly oil supply country, has some violence. Those violence gave the negative effect on the oil supply.

Based on this lecture on podcast, demand and supply are two most crucial elements to affect oil price. Rising demand or slumping supply result oil price going up. In other words, sliding demand or excess supply make oil price down.