When it comes to energy and especially oil, we’re in a world market. This means changes in purchases of oil by other countries can impact the price we pay. N.C. State University economist Mike Walden gives examples of how this global market has impacted all of us.
“Let me give you two comparisons … one a longer-term comparison and … a shorter-term comparison of 1980 to 2010. U.S. consumption of oil, or usage of oil in our country, the U.S., increased 12 percent. That was less than half the 26 percent increase in the world. And for one country, China, from 1980 to 2010, they increased their oil consumption 400 percent.
“Now more recently if you look at the last decade, from 2000 to 2010, U.S. consumption of oil actually dropped. We’re actually using less oil now than we did 10 years ago — dropped by 3 percent. World consumption of oil went up 11 percent. And Chinese consumption of oil went up 75 percent.
“So, the message here is, number one, yes, we are in a world oil market. And number two, prices are being driven more and more by forces outside of our country, where consumption is growing much faster than here in the U.S.”Category: Economic Perspective