$100 oil prices and their macroeconomic effects
Oil prices remain above $100<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />
Their article says that
“Prices rose as traders digested the fact that crude stockpiles were at their lowest levels since January 2005. The weak US dollar has also increased demand for oil, which is priced in dollars, because it makes it relatively cheaper for holders of stronger currencies.”
“It's going to have a huge impact on overall global inflation," said Steve Rowles, a commodities strategist with CFC Seymour securities in
Questions
(a) Using a supply and demand diagram illustrate the effects of the factors mentioned above on the market price of crude oil
(b) Outline three ways in which a rise in oil prices might lead to an increase in global inflation
(c) Explain why rising global inflation could cause macroeconomic difficulties for a country such as the
Further reading on the $100 crude oil price
The Guardian:
The heavy price of $100 a barrel
http://www.guardian.co.uk/business/2008/jan/04/oil.creditcrunch
The Times
How $100 oil will change your life
http://business.timesonline.co.uk/tol/business/economics/article3137515.ece
The Economist
"The $100 barrel of oil is here to stay"
http://www.economist.com/displayStory.cfm?story_id=10436089&fsrc=RSS
