U.S. energy prices are greatly affected by industry demand. The higher the demand for fuel, the more expensive it becomes. Although the economic climate of 2009 should have reduced U.S. energy prices, growing demand for crude oil in other countries has kept the price much higher than is desirable.
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.
You should also understand that the price which revolves around crude oil influences other fuel costs. You will find that electricity, gasoline and petroleum are the big three. It's crazy to think that even though we're going through a stressful time, prices are expected to rise when we reach 2010. This is because we'll be well above our 1.25 million barrels we use each day right now.
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.
Let's face it, as of right now the economy is unstable and the U.S. energy costs are even more uncertain. The only way for the demand to get lower is by companies and small businesses no longer being able to afford the spike in prices. This usually occurs when fuel prices rise and are considered to high. On the surface this would look like a complete downfall, but eventually everything will pick up again. What it comes down to is a difficult balance between crude oil sales and everyone relying on one another. Eventually we'll see the fuel prices rise again when the crude oil prices do.
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.
The economy is mentioned constantly in relation to U.S. energy prices. As the international recession is far from over, it is expected to take at least a year for demand for fuel to rise back to the peaks of previous years. Since early 2008, prices have steadily declined in response to the sudden uncertainty in finance and industry that had led to worldwide economic recession.
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.
With the lowered demand for energy, fuel stockpiles are much higher than expected. This is lowering the price, as more is available. Natural gas, for example, has stockpiles close to reaching a 5-year high. It will be a long time before demand outstrips supply once more and prices will significantly rise. However, while prices remain low, industry should be encouraged and the economy will be 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. - 29971
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.
You should also understand that the price which revolves around crude oil influences other fuel costs. You will find that electricity, gasoline and petroleum are the big three. It's crazy to think that even though we're going through a stressful time, prices are expected to rise when we reach 2010. This is because we'll be well above our 1.25 million barrels we use each day right now.
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.
Let's face it, as of right now the economy is unstable and the U.S. energy costs are even more uncertain. The only way for the demand to get lower is by companies and small businesses no longer being able to afford the spike in prices. This usually occurs when fuel prices rise and are considered to high. On the surface this would look like a complete downfall, but eventually everything will pick up again. What it comes down to is a difficult balance between crude oil sales and everyone relying on one another. Eventually we'll see the fuel prices rise again when the crude oil prices do.
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.
The economy is mentioned constantly in relation to U.S. energy prices. As the international recession is far from over, it is expected to take at least a year for demand for fuel to rise back to the peaks of previous years. Since early 2008, prices have steadily declined in response to the sudden uncertainty in finance and industry that had led to worldwide economic recession.
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.
With the lowered demand for energy, fuel stockpiles are much higher than expected. This is lowering the price, as more is available. Natural gas, for example, has stockpiles close to reaching a 5-year high. It will be a long time before demand outstrips supply once more and prices will significantly rise. However, while prices remain low, industry should be encouraged and the economy will be 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. - 29971
About the Author:
About the author: Jerry Dyess has been involved in the Electricity market segment for the past 7 years. He has published many articles on Business Electric rates.
