Wednesday, 25 June 2008

Crazy gas price hike: Shaking the foundations of Economics

Could someone please explain: why did the oil price ascend to $0.81 yesterday after Saudi Arabia pledged last Sunday to increase its output by 200,000 barrels in July? Abnornal na yan ah. I mean it totally transcends the principle of bringing down the price of a commodity if supply is increased (i'm not excatly sure what's that principle/rule called.)

Sa totoo lang kasi, I know for some reason that gas prices climb because of SPECULATIONS (ie. speculations of supply disruption from ever-chaotic major supplier Nigeria, Bush-hater Chavez the President of another major producer Venezuela, and also depends on the political atmosphere of Russia.) But take note that those are primarily because of fears of supply disruption. Going back, this one is entirely different. Saudi Arabia pumping more to ease the price. Supply augmentation. But what the hell happened? The prices just climbed. Isn't that crazy? nuts? Yeah. ang mahal na tlga ng gas and I'm going nuts.

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