Sweet crude oil

http://news.bbc.co.uk/2/hi/business/6399117.stm

This is an article on the ever rising price of oil. This time it is the sweet crude oil that turns out to be a type of petroleum that contains less than 0.5% sulfur. That makes it sweet, compared to a higher level of sulfur in sour crude oil.

Back to the story... The weather is also a factor that influences the local demand for heating oil. It is not surprising, that when a snow storms hit the biggest consumer of oil - US, the price of oil goes up. This is a natural rise caused by a shift of the whole demand curve. What intrigued me in the article is the OPEC policy to cut the supply of oil during the winter time. Not only the demand is higher but the supply is also smaller. Those facts combined with an unstable situation in Middle East, are the cause of the rise in price. It is just a shift of a line on a graph, but has such serious consequences.

The article also made me think about how important the price of oil is for the world economy. The statement that we live in an oil era is not exaggerated. The VC of most of businesses is depended on oil price. That means that it doesn't only influence the cost of using our cars but the price of every good or even service that we pay for.