Why is the price of oil rising?

An oil tanker is docked at the ConocoPhillips Alliance Refinery in Belle Chasse, La., last June. The refinery, located in Plaquemines Parish, processes about 247,000 barrels of crude oil per day.

TEXT OF STORY

Bill Radke: You know what else keeps going up? Oil. It crossed $80 a barrel overnight -- first time that's happened in a year. Here with more on the oil outlook is Marketplace's Stephen Beard in London.


Stephen Beard: A slew of strong U.S. corporate earnings has played a part in the oil price rise. The view is gaining ground that the global economy is recovering, and that with rising demand for crude, we could soon be hitting problems with supply, even though the world is still awash with oil.

Nick McGregor is with Brokers Redmayne Bentley

NICK MCGregor: If economic recovery does come through, then we could quite quickly see those inventories erode, and we could be back in a situation where we have a supply pinch once more, and that's what's driving prices and holding them at the moment.

A new report -- just out from the group called Global Witness -- claims that we are indeed heading for a supply crunch. It argues that due to years of underinvestment by the oil industry, the world within only a few years could begin to run short of crude.

In London this is Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...