One of the big economic stories this year has been the high price of oil. As winter approaches in the northern hemisphere, there is growing concern about rising prices for heating fuel. Some economists see the increase in energy costs as temporary, but others are predicting a more serious trend. VOA’s Greg Flakus has more from Houston, Texas.
Oil companies are reporting record profits as prices for crude on the world market remain high. Many companies have been reluctant to spend much of their new profits on exploration and development, however, because past experience has shown that rapid price increases are usually followed by sharp downturns. But, there are also experts who believe oil production could be on the verge of peaking, resulting in even higher prices ahead.
Most people in the oil and gas industry believe prices will come back down in the months ahead as new production comes online and economic growth cools. But what would happen if oil production were not able to keep pace with demand? What if, in fact, worldwide production were to peak soon, meaning that less-and-less oil would be produced every year even as demand soars?
Audio Report by Greg Flakus [6:29] | mp3
VOA News Report [5:09] | download
