Oil prices to keep rising as demand grows

With world oil prices nearly touching $100 a barrel in the past week, we are living through the third great energy shock of the post-war era. But this time, demand from India and China means that prices are unlikely ever to go down again.

Since 2004, oil prices have risen on a scale similar to that of the first oil shock at the start of the 1970s, and double that of the second oil shock at the end of the 70s.


China’s oil consumption has doubled over the past decade and India’s has increased by two thirds.

A new Australian study says the problem in the two earlier oil shocks was with supplies of oil. This time, study author Professor Michael Wesley says, the problem is that demand is unlikely to subside.

“The growth in the consumption of oil and oil products by predominantly the United States, China and India is rapidly outstripping the ability of the oil market to supply those amounts and this will inexorably drive up the price of oil,” he said.

Professor Wesley predicts that this time, the prices won’t drop back.

ABC (Australia)