Oil prices have continued their meteoric rise, hitting new all-time highs above $115 a barrel. From Washington, VOA's Michael Bowman reports.
Just weeks after topping $100 a barrel, light sweet crude rose above $115 a barrel in electronic trading on the New York Mercantile Exchange amid further weakness in the U.S. dollar, as well as tight gasoline inventories reported by the U.S. Energy Department.
The constrained fuel supply comes as Americans prepare for the summer months, a time when gasoline consumption typically rises due to increased vacation travel. This year, summer demand could be tempered, however, by a slowing U.S. economy and the sharply higher gasoline prices.
Experts say a variety of factors are contributing to the long-term rise in oil prices, including increased demand in large developing countries like China and India.
"The demand numbers coming out of Asia, although slower than a year or two ago, have certainly put into the fore [shown] that the U.S. is not the big, big driver in demand that it used to be," said Ray Carbone, who heads the New York-based energy trading firm Paramount Options. "And even though there is all this bearish news as far as demand in the U.S., we have to keep in mind that the emerging market demand is robust and has taken up the slack. And that seems to be what people are having trouble coming to grips with, I think."
While global consumption of fossil fuels continues to rise, the world's largest oil cartel, OPEC, has resisted calls to boost production. Experts say, so long as demand exceeds supply, oil will become evermore costly.
The current surge in oil prices is a continuation of a trend that has seen crude rise relentlessly from less than $25 a barrel as recently as 2002. During the past 10 years, oil prices have risen by more than 800 percent. When adjusted for inflation, however, oil prices remain lower in real terms than the highs recorded in the late 1970s and early 1980s.