High Oil Prices

BusinessWeek has an article analyzing the current skyrocketed oil prices, why they are where they are, and what effects it will have on the world economy. Why the high oil prices? Political uncertainty in the big oil producing countries and unprecedented, unexpected demand [PDF] -- mostly due to the global recovery that's coming from everywhere at once, including the booming China [PDF]. In 2004, China will consume 830,000 barrels of oil a day more than last year. Meanwhile, OPEC countries haven't been investing in [PDF] developing new oil potentials to match growing demand. The Bush administration has made the situation worse by introducing uncertainty in the world -- instead of stabilizing Iraq (and Sadaam was doing a good job of that by himself), they've introduced anarchy to the Middle East. The good news in all of this is that the higher prices are leading to conservation efforts across many fronts. Whether the world sustains the new found interest in conservation, however, is another story.