Oil supply grows, but so does price
Source: San Francisco Chronicle
It's basic economics: An increase in the supply of a product coupled with a decrease in demand results in a drop in price.
But that isn't happening with oil.
Since 2008, oil production in the United States has surged a stunning 28 percent as the controversial practice of fracking unlocks new supplies in North Dakota and Texas. At the same time, use of oil and petroleum products has fallen 4 percent, as Americans switch to more efficient cars.
... The high price illustrates a brutal truth of today's interconnected world - oil is a global commodity, bought and sold in a global marketplace. Even while demand falls in the United States, it's growing in countries such as China and India. And it's growing fast enough there that booming oil production in the United States can't keep pace.
... "It really debunks the myth of 'Drill, baby, drill,' that if we just produce more oil, prices will stay low or go lower," said Michael Marx, director of the Sierra Club's Beyond Oil campaign.
Read more: http://www.sfgate.com/business/article/Oil-supply-grows-but-so-does-price-4225080.php
