Oil Prices Have Increased 25% in the First Quarter of this Year:
Crude oil has increased 25% in the first quarter of 2008. The news media claims that this is due to the dramatic consumption of energy by China and India. The news also claims that there has been a reduction in the supply of oil from both Iraq and Nigeria.
Supply and Demand Only Accounts for Part of the Price Increase:
The news reports are accurate but misleading. A small percentage of the increase is due to China and India. On a global level the data indicates the exact opposite: that the consumption of oil is down, and the supply is up. In the fourth quarter of 2007, consumption of crude oil declined from 87 to 86 million barrels per day. Within the same period, the supply of crude oil increased from 85 to 87 million barrels. According to leading economists, when supply increases, and/or demand declines for a product or commodity, then the price will drop.
However, this did not occur. The price of oil has actually sharply increase.
The Sharp Increase in Oil Prices is Due Primarily to Commodity Trading:
How does commodity trading play a role in raising oil prices? Partly the volatility in Venezuela and Nigeria are having an impact. But predominantly it is the surge in money from the stock markets and real estate that are flowing into the commodities market; specifically, the oil. Traders then bid the price up to reap huge profits.
In addition, the decline in the dollar is contributing to the rise in prices. Because oil is pegged to the dollar, OPEC raises the price of crude to maintain its profit margin. With prices declining in real estate and stocks, money is flowing into commodities such as oil and gold futures. This is resulting in a bidding war and a potential bubble.
What is the Future Outlook?
Prices for oil will continue up until the commodities market for crude oil declines. When this will occur is uncertain. When it does occur, it is uncertain just how severe the drop will be.
But we do have the technology to fight the high price of gas today. There is a way to dramatically increase the gas mileage for little cost.
We Can Fight High Gas Prices:
Within the next few years, car manufacturers will be introducing high-mileage cars. But there's no need to wait or to pay a premium for the next generation of cars. Techonology exists today that provides an inexpensive way to reduce our consumption of gasoline by increasing significantly gas mileage. And, there is no need for any expensive modifications or adjustments to the engine.
The technology is electrolysis: a simple process that converts water to a highly combustible gas called oxyhydrogen. Oxyhydrogen has 3x the energy in BTUs as gasoline, which makes it an incredible energy source.
This system is completely safe because the oxyhydrogen is only generated on-demand and is fed to the engine immediately. There is no fuel cell required to store dangerous hydrogen as occurs in the Hydrogen Fuel Cell car.
As a bonus, when oxyhydrogen burns in the engine's cylinders, it is converted back to water. This means reduced polution at the tail pipe and a reduction in carbon build-up in the cylinders.
Based on your driving habits and your vehicle, the increase in gas mileage will vary. Many have claimed an increase in mileage of over 50%, which results in saving thousands of dollars annually.
This system works along the same principal as the Hybrid car. By capturing wasted energy and then recylcing it as needed, dramatic improvements in gas mileage can be realized. Wasted energy occurs whenever the engine is running and the car is at a standstill, or when coasting along the highway.
Article Source: http://www.orbitaloc.com/
Read more about Gas Prices Going Up or if you would like more info on the technology to inexpensively fight rising gas prices, go to How to Run My Car On Water.
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