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For a time, it seemed like oil prices would keep falling and that an age of cheap oil would once again be upon us. This thought dismayed many environmentalists, who feared that cheaper oil would discourage investment in renewable energy sources and encourage Americans to resume their old driving habits. However, on Friday, March 13, prices began to climb once again.
The sudden increase, to more than $47, was initiated by mixed reports from OPEC the week before a meeting. The group is expected to radically cut production with the goal of further increasing the commodity's market value. Some members, like Qatar and Nigeria, have argued against further cuts, but are opposed by others, notably Venezuela. Christoffer Moltke-Leth, head of trading at Saxo Capital Markets commented that "it seems to be hard for OPEC to reach consensus this time," and added that he expects "a small cut, less than the market expects."
The weak economy of the United States has hurt countries that rely on exports, like oil. The International Energy Agency reported that it expects demand to continue to decrease through 2009, by as much as 1.5 percent from last year. Some analysts believe that, because of this reduced demand, the price of oil will remain under $50 for the foreseeable future.
For environmentalists, declining demand, and the reduction in emissions that it implies, is great news. With oil prices at a comparatively low level and demand still decreasing it is a sign that, perhaps, people are aware of the impact fossil fuels have on the environment and are ready to find sustainable alternatives to satisfy our energy needs.
Find out more about the latest environmental news on Focus Earth: March 14, 2009: Oil on the Fall and Running the Sahara.
Read more about oil prices and production:
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