International oil price has soared in about 10 months since it dived to 49.9 US dollars per barrel on January 18 this year without any return or interruption. The price of New York crude oil (or light, sweet crude) went up to 98.61 dollars, hitting an all-time ever since 1980. So people worldwide are deadly sure that oil price will reach 100 dollars per barrel within the year.
The Goldman Sachs Investment Banking., U.S. has forecasted that oil price could surge to the highest of 105 dollars per barrel by the end of 2007 for the reason that its resources are limited and prospects for beefed-up production dim, and the "era of cheep oil price" has gone by and can hardly return.
In retrospection, crude oil was sold at an average price of 1.15 dollars per barrel in nearly two decades from 1953 to 1970 and, in the ensuing 1970-1973 period, the Organization of the Petroleum Exporting Countries, or the OPEC, in a bid to safeguard their common interest, raised their crude price from 1.8 dollars per barrel to 3.05 dollars per barrel.
The Islamic Revolution in Iran inflicted an energy crisis in 1979 and, in April of the following year, crude price skyrocketed to surpass the 100-dollar mark to 101.70 dollars per barrel for the first time in history. But that was merely "a flash in the pan" and oil price plummeted pretty soon. Oil price stayed around 34 dollars per barrel to the highest around the outbreak of the Gulf War in 1990.
Afterwards, average annual global crude price decreased to 23.74 dollars per barrel in 2002; it rose to 26.78 dollars in 2003, 33.64 dollars in 2004 and 49.35 dollars in 2005 and approached approximately 60 dollars in 2006. In view of an oil price rising curve, the average crud price this year has far exceeded the level of last year.
Consequently, it is crystal-clear that it has become a trend that the rise of oil price on the world market is keeping pace with the advancement of the era. The current soaring oil price has nevertheless been spurred by varied factors.
At present, the Turkish army and the guerrilla forces of the Kurdish Workers' Party, which is known by its Kurdish acronym PKK, have been locked in clashes in northern Iraq; Iran's nuclear enrichment program is suspending; and oil production zones in the Middle East region have been bogged down in countless risks and dangers, noted oil market analysts, and all these tense geopolitical situations have added "wings" to the oil price hike.
Moreover, devastating hurricanes in Mexico since September have incurred losses to its oil industry, the American oil reserve dropped for two months in a row, the global oil refining capacity is in straitened circumstances along with a natural rise in the seasonal consumption of oil for heating in the winter time and a ferocious, unbridled speculation on global oil market.
What deserves particular heed here, however, is that the exchange rate of the US dollar against both euro and British pound has reached a new low recently. The dollar has declined to US$ 1.45 per euros and US$ 2.08 per British pounds and, as a result, crude price in term of US dollar has further hiked. In a word, a "unique combination" of political, natural and financial factors has altered prospects for the short-term oil price.
The soaring oil price has, as a matter of fact, arrested high attention of most nations. In France alone, popular grievances have run high with nationals seething with resentment and complaints from varied economic sectors. Fishermen at one of the country's main ports on the Atlantic coast went on strike over rising fuel costs last Friday, or November 2nd to appeal for government compensations. Meanwhile, a strike by Air France flight attendants grounded more than 30 percent of its planes, and rising gasoline price imbued air passengers with discontent. The price of unleaded gasoline at gas stations in France has now reached over 1.4 euros per liter. Hence, French President Nicola Sarkozy is now facing a turbulent November.
Although the strong euro has offset, to some extent, the impact of oil price on the economy and social life in various European nations, local people are fear that the deteriorating situations would make enterprises less competitive and inflation more serious and worrisome. For this reason, the French government has appealed for the OPEC to raise overall crude output on one hand and, on the other hand, decided to release a little more than 2 million barrels of reserve crude oil to alleviate the short-term shortage.
The failure to cope with the ongoing oil price hike is sure to implicate the global economy, whereas the best option for the rein of galloping oil price is hopefully to invest more in developing alternate fuels as part of an effort to go on cutting oil consumption, acknowledged related energy experts and scholars.
By People's Daily Online
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